Red 5 Ltd. has reported the results of a prefeasibility study (PFS) for development of a 10-year open-pit mine at its King of the Hills operations 28 kilometers (km) north of Leonora, Western Australia. The open-pit would be developed as part of an integrated operation combining open-pit production with ongoing production from the current underground mine.

A new 4-million-metric-ton-per-year (mt/y) carbon-in-leach processing plant would be constructed on site, providing processing capacity for the integrated operation. Annual production over the 10-year mine life is estimated at 140,000 ounces per year (oz/y) of gold at average all-in sustaining costs of A$1,167/oz of gold produced. Capital costs to develop the project are estimated at A$218 million.

Project upsides include potential production from 1.1 million oz of underground resources, regional oxide deposits, and ongoing exploration.

The PFS is based on a probable King of the Hills open-pit ore reserve of 36 million mt grading 1.25 grams/mt gold for 1.45 million oz of contained gold and a probable ore reserve for the satellite Rainbow deposit of 1.4 million mt grading 1 g/mt gold for 44,000 oz of contained gold.

Red 5’s board of directors has approved development of a full feasibility study of the integrated project. The study is scheduled for completion by mid-year 2020 at an estimated cost of A$4 million and will include consideration of inferred mineral resources outside the current pit shell, potential underground exploration upside, and regional exploration.

Red 5 Managing Director Mark Williams commented, “The delivery of this maiden JORC 2012 open-pit ore reserve and the supporting PFS is a significant milestone for our shareholders. It marks a key step towards realizing our objective of transforming Red 5 into a substantial mid-tier gold producer with a diversified production base and production profile.”

Site development works and supporting infrastructure required for the project will include access roads and tracks; an accommodations village with 280 rooms; a communications network utilizing an existing local microwave mast; transportable buildings, including offices, crib rooms, and toilets; steel-framed buildings, including workshops, warehouse, and storage; a fuel storage and distribution facility; power and water supply; and wastewater treatment.