KAU produces 8,115 ounces of gold just as gold hits new all time highs

Our gold producing Investment Kaiser Reef (ASX: KAU) has just released its quarterly production numbers from its Henty mine in Tasmania.

KAU managed to deliver:

• 8,115 ounces of gold production - annualised that would be ~32,460 ounces which is higher than the targeted 25,000 ounces (or 6,250 ounces each quarter) that KAU had forecast for the Henty mine when they bought the project back in May.
• Average head grade of 4.12g/t gold - A slight improvement on KAU’s last quarter where head grades were 4.05g/t gold.
• Processing recovery of 89.1% - compared to 87.1% last quarter - again another small improvement in terms of performance.

Overall, we think those are some really solid headline numbers and we hope higher production, stronger recoveries and a higher average head grade mean better performance from an economic standpoint…

Especially with the gold price hitting new all time highs again this morning:

The gold price is now up US$900 per ounce since KAU announced the acquisition of Henty - which is something no one could have priced in when the deal was getting done.

The positive is that this will mean the mine is able to pay itself off a lot quicker than KAU would have thought when it was doing the deal…

We also noticed in today’s announcement KAU confirming that “upgrades on the henty processing plant” had mostly been completed now.

That could mean future production numbers from the mine also improve. KAU said that “increased throughput trials” would start shortly so we could start to see some newsflow on that front over the coming months.

(Source)

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 is the plan KAU set in a recent investor presentation:

(Source)

Exploration program at Maldon 🔄

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

Because KAU is drilling with a diamond rig, we could see early visuals with visible gold in drillcores (which is usually a good sign the company is hitting the right rocks).

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…