Gold miner Red 5 cuts losses in FY23 as production ramps up at its new KOTH mine
Wed Aug 30 2023
Australian gold miner Red 5 (ASX: RED) yesterday announced record gold production of 165,544 ounces for the 12 months to 30 June 2023 (FY23), contributing to gross sales revenue of A$422.7 million, up 156% from the prior year.
The company said that gold was produced from the new King of the Hills (KOTH) gold mine in Western Australia, with ore feed sourced from the KOTH open pit mine, the KOTH underground mine and the Darlot underground satellite mine, and processing at the new KOTH process plant.
Commercial production was declared at the KOTH gold mine on 16 December 2022, with production for H2 FY23 of 102,574 ounces, at the upper end of guidance and mid-range for cost guidance at A$1,837/ounce.
The company said the processing plant is now operating at an annualized throughput rate of up to 5.5Mtpa, 37.5% higher than the nameplate design of 4.0Mtpa.
Red 5 also reported it incurred net loss from continuing operations for the period of A$8.7 million (30 June 2022: operating loss from continuing operations of A$48.7 million and net loss of A$28.6 million).
“The net loss reflected the ramp-up of KOTH mining and processing activities during the first half of the financial year,” the company said in a press release.
However, Red 5 noted that operations have been cash-flow positive since March 2023, putting the company in a “solid position” to continue to “de-leverage and strengthen” its balance sheet for the future.
The company said its net debt position improved by A$56.6 million during the second half of the year, standing at A$81.9 million at 30 June 2023.
“We continue to deliver positive cash flow from our operations and we are targeting to accelerate our debt repayments in the year ahead. This will provide the company with a robust balance sheet for future growth as we continue to unlock the potential of our long-life King of the Hills mining operation,” said managing director Mark Williams.
Red 5 also reaffirmed its FY24 production guidance of 195,000 – 215,000 ounces at an AISC of A$1,850 - A$2,100/oz.
Source: https://www.kitco.com