Shares in emerging WA gold miner Red 5
(ASX:RED) jumped to a 52-week high of 33 cents yesterday after the company's annual meeting heard an update forecast from the new chair, Russell Clark.
Red 5 shares climbed a solid 8% at one stage after the meeting heard Mr. Clark forecast that the company would exceed guidance for gold production from its still-growing King of The Hills mine in WA's Leonora gold district.
The company's KOTH mine is now operating at an annualized throughput rate of up to 5.5 million tonnes per annum. Mr. Clark said this is almost 40 percent above its nameplate design capacity.
"This firmly establishes King of the Hills as the largest and lowest-cost processing hub in the Leonora district. It provides a clear indication of the large scale and potential of this outstanding asset," he said.
The mine produced 55,009 ounces of gold in the three months to September (June Quarter: 61,705 ounces) at an all-in sustaining cost (AISC) of $A1,696/oz. Quarterly gold sales were 54,383 ounces (June Quarter: 58,960 ounces), resulting in operating cash flows of $43.8 million for the September Quarter.
"Our production performance this financial year puts us firmly on track to achieve the top end of our forecast production guidance for the 2024 Financial Year, which is between 195,000 and 215,000 ounces of gold," Mr. Clark stated.
"In addition, the strong cash flow generation from our mining operations has enabled the company to reduce its debt, with the King of the Hills debt facility reduced from $175 million at the end of the 2022 financial year to $112.8 million at the end of the September Quarter. Red 5's net debt position stood at $68.2 million at the end of September, with $44.6 million held in cash and bullion.
"These collective achievements have been appropriately reflected in a steady increase in the company's market capitalization over the course of the year, to well over $1 billion, supported by a robust gold price environment.
"Given the quality of our assets, I have little doubt that there is additional room for growth in this regard, provided we continue to deliver on our undertakings to the market.
"The quality of King of the Hills has certainly attracted the attention of our peers, and we welcome the addition of Silver Lake Resources Limited onto the register as our new largest shareholder."
