KAU preparing a “Strategic Plan” for its Victorian gold project & processing plant

Our gold producing Investment Kaiser Reef (ASX: KAU) just defined a resource at one of the waste dumps sitting on its Maldon gold project in Victoria.

The Maldon asset is just a ~4km drive away from KAU’s 200ktpa operational processing plant which is currently running well below its nameplate capacity.

KAU’s operations are largely focused on its Tasmanian asset - the Henty gold mine - where KAU produced 6,946oz of gold and 6,526oz of silver last quarter, it generated $13.7M in positive cash flow…

Today, KAU has started to put together the building blocks for the company’s strategy in Victoria.

KAU recently drilled across waste dumps leftover from previous mining programs on the asset and has now defined 566kt, 0.48g/t gold resource for a total 8,649oz resource inventory.

At today’s gold prices of ~A$7,200 per ounce that's ~A$62M in gold sitting in waste dumps… that KAU now plans to process through its 100% owned plant.

(source)

While the resource is relatively modest, the way we see it the ore could be a good source of revenues for the plant during a period where it is operating well below its full capacity.

Hypothetically, if KAU could process the 566kt across three years (still operating below the full capacity of the plant) that could generate ~$20M a year in revenues at today’s gold prices - which we would hope is enough to pay for the costs of trucking, processing and refining those waste dumps.

Even if the Maldon plant broke even while KAU built a restart plan for the project we think it would be a win for KAU… especially while the Tasmanian asset continues to generate positive cashflows.

KAU has in the past put out a “Maldon Restart Study” which we covered in detail here: Mine restart study released for KAU’s Maldon gold project, you can see the study itself here.

That study showed:

• A 2 stage plan (stage 1 taking 8 months and stage 2 15 months) to process the known mineralisation
• A rapid start up opportunity
• The mine was put into care and maintenance when the gold price was ~A$1650/oz and was over A$4000/oz at the time of release, currently the price of gold is over A$7000/oz

Now, KAU’s appointed a new exploration manager, a project manager and has started re-establishing services to the old underground decline at the project…

KAU expects to put out a “Maldon strategic plan” - which we hope builds on that previous restart study…

(source)

We think KAU is in a much better position now to execute things at Maldon - now that its Henty mine in Tasmania is producing positive cash flows and the company had $43M cash in the bank at 31 December 2025. (source)

A completely different position financially to where KAU was the last time it released that Maldon restart study.

What we want to see next from 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.

Recently the company confirmed that upgrades to the plant are mostly in place with trials having been done and further refinement on the processing side in the works.

(source)

Exploration program at Maldon 🔄

With KAU’s drilling at Maldon complete and results released, we want to see follow up drilling on the results announced here recently.

KAU has today confirmed that works to re-access and rehabilitate the underground decline are now in progress. So we are looking forward to seeing KAU drill new areas of Maldon from underground as these works also include additional drill position development. (source)

Also today KAU confirmed that the Maldon Strategic Plan will be released shortly. (source)

Update on potential for waste dump processing 🔄

KAU processed ~3,234t of ore at an average grade of 1.61g/t gold with 90.7% recoveries in January.

All of that came from stockpiled ore at the Union-Hill mine.

We want to see KAU increase those processing rates by blending in the waste dumps from the project (where the resource defined today sits).

IF KAU can get the waste dumps processed and capacity up at the plant, we think it could improve the cashflow of the company’s Victorian operations significantly - a good result for us would be to see the Victorian operations being cashflow breakeven.