Red 5 and Westgold Resources defined their June 2024 quarter by finalising key mergers, while Gold Road Resources’ operations bounced back following heavy rainfall impacts earlier this year.
Red 5
Red 5 continued its winning streak with its gold production, producing 108,693 ounces (oz) of gold and 177 tonnes (t) of copper during the June quarter.
The June quarter marked Red 5’s fifth consecutive quarter over 50,000 ounces, bringing its 2023–24 financial year (FY24) gold production to 457,497oz in gold equivalent.
Red 5 sold 110,818oz of gold and 165t of copper at an average sales price of $3175/oz, which included Silver Lake Resources’ full quarter of gold and copper production.
The King of the Hills gold operation in Western Australia was a particular highlight, producing 52,780oz for the June quarter and producing a record 210,940oz for FY24.
“During the quarter the newly consolidated operations continued to perform well, with all three operations meeting or exceeding their respective FY24 guidance ranges,” Red 5 said.
“The performance underscores the position of Red 5 as a leading, diversified mid-tier gold producer of relevant scale, today.”
Red 5 officially implemented its merger with Silver Lake on June 19 2024, creating a diversified mid-tier gold company set to produce around 445,000oz per annum.
“The integration process will systematically focus on consolidation and optimisation of the business and its operations through harnessing the enhanced technical capability of the combined teams,” Red 5 said.
“The repayment of the project loan facility following the quarter end on July 8 demonstrates the strong momentum of the integration process.”
Red closed out the June quarter with $453.7 million in cash and bullion and $92.9 million in debt. As of July 31, the company held $159 million for a net cash, bullion, and liquid investments position of around $520 million.
“Red 5 retains a strong balance sheet with sector leading financial flexibility to optimise the King of the Hills operation and unlock the full value of the established infrastructure without the constraints of a project finance facility, while continuing to pursue broader growth and life of mine extension opportunities across the portfolio,” Red 5 said.
Westgold Resources
As Westgold prepares to finalise its merger with Canadian company Karora Resources, it recorded solid gold production results for the June quarter.
The company produced 52,795oz at an all-in sustaining cost (AISC) of $2041/oz and sold 58,575oz at an achieved gold price of $3493/oz, generating $205 million in revenue.
The results led to Westgold achieving its FY24 guidance, with 227,237oz produced at an AISC of $2164/oz.
“We are pleased to have delivered the top end of our adjusted full year production and bottom end of our cost guidance for FY24,” Westgold managing director and chief executive officer Wayne Bramwell said.
“Guidance was adjusted in April 2024 to reflect the closure of the underperforming Paddy’s Flat mine, but was a prudent business decision, demonstrating management’s resolve to prioritise cashflow and profitability ahead of production targets.”
Westgold achieved its sixth consecutive quarter of positive cash build, adding $16 million in cash and bullion position so it could close the quarter with $263 million.
“In recognition of Westgold’s strong financial position and growing confidence in its ability to generate further positive cash flow, the Westgold board declared a fully franked final dividend of 1.25 cents per share this quarter, culminating in a total of 2.25 cents per share in total dividends for FY24,” Bramwell said.
“FY25 will see business momentum continue and we expect the closure of the merger with Karora to occur tomorrow (August 1). The resulting merged entity, Westgold 3.0, becomes a top five, well-funded and unhedged Australian gold producer.
“As an integrated owner miner and driller with a proven record for delivering cost effective resource growth, Westgold 3.0 has enviable growth potential with multiple organic opportunities and 3200 (square kilometres) of exploration tenure across two strategic Western Australian gold districts.”
Gold Road Resources
After the Gruyere joint venture in WA was impacted by heavy rainfall earlier this year, Gold Road appears to be on the mend, producing 62,535oz at an AISC of $2441 per attributable ounce during the June quarter.
“Following the substantial and protracted regional rain event reported in early March, processing and mining operations remained suspended for the first half of April, with a ramp up to normal operations continuing through the remainder of April,” Gold Road said.
“The resumption of operations at Gruyere was initially supported by the transport of consumables through the Northern Territory. Gruyere assisted the Laverton Shire with extensive repairs to flooded and damaged sections of the Great Central Road, the main haulage route to Gruyere.
“The road was reopened to all traffic on April 30 2024 after seven weeks of road closures.”
The weather events at Gruyere and the associated increase in AISC/oz resulted in Gold Road revising its FY24 guidance to 290,000–305,000oz at an attributable AISC guidance of between $2050 and $2200 per ounce.
Despite the revision, the company saw record rates of mining and plant performance at Gruyere in May.
Godl Road sold 31,216oz at an average sales price of $3532/oz and saw an increase in attributable operating cash flow from Gruyere, recording $74.2 million for the June quarter.
Other highlights for the company include its $50.8 million investment in De Grey Mining’s entitlement issue in May, receiving bronze in the Australasian Reporting Awards for the third year in succession for sustainability reporting, and developing the Yamarna gold project in Laverton, WA.
The company ended the June quarter with $86 million in cash and equivalents with no debt drawn.
Subscribe to Australian Mining and receive the latest news on product announcements, industry developments, commodities and more.
