KAU completes drilling at Victorian gold project

Our gold producing Investment Kaiser Reef (ASX: KAU) just completed its latest round of drilling at its Maldon gold project in Victoria.

KAU said that 22 holes were completed, for a total of 960m at Maldon.

This drilling has targeted the Eaglehawk Reef, beneath the old workings of the Union Hill Open Pit floor, with all samples having been sent off for assay.

The location of this is important because KAU owns a processing plant that currently has ample capacity, just over 4km away:

Historically, the Maldon Gold Project has a rich history, having produced over 1.75 million ounces of gold at a very high grade of 28g/t gold.

With the Eaglehawk Reef contributing approximately 491,000 ounces of high-grade gold to this total, this is where KAU has targeted in this drill program.

With this round of drilling KAU’s main aim was to see if there were any unmined extensions to that Eaglehawk Reef that may warrant bringing Maldon back into production through the existing underground decline at the project.

Here is a photo from our site visit looking into the old union hill pit where KAU drilled (and toward the decline portal):

(Source - Our photo looking into the pit where KAU was drilling down from)

See our deep dive on KAU’s drill program here: KAU: Gold exploration drilling has begun. Gold’s next leg up also begun…

Drill results expected within 2 weeks - why we think they could be material to KAU

The main bits of newsflow the market is likely watching with KAU is production numbers from its Henty mine in Tasmania.

After all, the gold produced, during an all time high in gold prices is what has the biggest impact on KAU’s cashflows and valuation.

We are still interested in the results from Maldon because of the recent successes of Southern Cross Gold and more recently Falcon Metals.

Falcon rerated more than 10x off very narrow high grade hits at depths of more than 500m (Source, Source). (the past performance is not an indicator of future performance)

(Source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

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…