When Red 5 poured first gold from its King of the Hills restart operation in June 2022, the company was already strategising further value-creation opportunities for its shareholders.
Achieving steady-state production was one goal, which Red 5 reached in December 2022, but exploring organic growth pathways was another key objective.
When Australian Resources & Investment spoke to Red 5 in July 2022, managing director Mark Williams said that once positive cashflow was achieved, exploration activities would be expanded.
“Next calendar year, we’re forecast to generate positive cash flow which we will use to expand exploration activities, where we’ve got a really strong organic pipeline,” he said.
“We’ve got some great targets, some low-hanging fruit to be able to increase the resource base in the underground. It’s been mined for eight years, both by us and St Barbara, and is open in all directions.
“We also have our satellite open pits in close proximity to King of the Hills and also some great targets at Darlot, including Ockerburry, Cables and Mission.”
We are starting to see these targets bear fruit. In early February, Red 5 announced a string of high-grade drill results at King of the Hills as it conducts resource extension and grade control drilling.
Some highlights included 25.3m at 5.85 grams per tonne (g/t) gold from 75.5m, 152m at 2.77g/t gold from 21m and 5.8m at 100.9g/t gold from 85m.
“These impressive drill results provide further support for our mine plan over FY23 and FY24, as well as opening up potential new mining areas for the future,” Williams said.
“King of the Hills is an enormous orebody, with significant areas remaining relatively undrilled, providing excellent potential for continued growth.”
Exploration is proceeding at Red 5’s Yandal South gold project, located approximately 90km north of King of the Hills, with the company this week highlighting positive first-pass drilling results.
From two air-core (AC) drill programs totalling 5708m, assay results from initial samples at the NW structure have returned multiple intervals of gold mineralisation associated with quartz and visible sulphides along 1.2km of strike.
Williams said Red 5 would conduct a seismic survey over the area to identify structural and lithological features to target during the next round of drilling.
Red 5 produced 36,260 ounces of gold from its King of the Hills operation in the December quarter (up from 26,710 ounces the quarter before) and has a production guidance of 90,000–105,000 ounces in the second half of FY23.
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