KAU increases gold reserves by 29%

Our gold producing Investment Kaiser Reef (ASX: KAU) just upgraded its gold reserves at its Henty mine in Tasmania.

The result of today’s update was an increase to reserves of 29%, to 199,000 ounces of gold at 3.3g

(Source)

This would be expected on its own to continue the current mining operation for more than 6 years with the aim to be producing above 30,000 ounces per year.

(when KAU first acquired the asset it had a life of mine of ~5 years)

KAU is also drilling right now with a second drill rig having recently been brought in with the aim of finding both new zones of mineralisation and extending the known resource.

The goal of this will be to see continued resource growth into the near future.

(Source)

Earlier in the week KAU provided an update on processing optimisation and throughput increases, we covered that here, so see this 30,000 ounces per year target as very achievable, especially once the improvements have been finished.

So with today’s update, this is showing that KAU is becoming a company with clear growth potential.

The increase to the reserves show an extension to the mine life and the opportunity to continue to build on this resource and reserve.

KAU’s MD Brad Valiukas was quoted:

(Source)

With a second drill rig on site we are keen to see the results, with drilling currently underway at the ‘Cradle Zone’, with a general focus for this program on exploration and resource extension:

Also today, KAU put out an updated presentation that can be viewed here.

What’s next for KAU?

Cost optimisation and exploration at Tasmanian project (Henty) 🔄

The main thing we want to see at Henty is for KAU to increase production rates and optimise costs.

Today the company confirmed that upgrades to the plant are mostly in place with trials to begin shortly on increasing throughput.

(Source)

Here KAU’s new managing director Brad Valiukas talking about the optimisation work KAU is doing on site:

Watch it here: Kaiser Reef: Henty Growth, Maldon Potential & A1 Update (KAU.ASX)

Exploration program at Maldon 🔄

Now with KAU’s drilling at Maldon complete, we want to see the results from drilling.

The reason we think exploration success at Maldon could be material for KAU is because of how close it is to KAU’s operating processing plant AND because Maldon was previously home to Australia’s highest grade gold mine - Nuggety Reef - which produced ~301k ounces of gold at ~187g/t gold grades.

Although not guaranteed, a major discovery at Maldon (even 1/10th of the grades Nuggety produced at) could be a game changer for KAU primarily because of the proximity to a mill which is currently operating at 20% of its capacity:

Read our prior article on the drilling commencement: KAU: Gold exploration drilling has begun. Gold’s next leg up also begun…