All gold but no diggers for Red 5

red 5

The King of the Hills site. Image: Red 5.

Red 5 has reduced its production guidance at the Darlot gold mine in Western Australia, blaming low production rates on industry-wide labour shortages.

The mine’s production guidance for the 2021 financial year fell to 74,000 – 78,000 ounces, a reduction of six to seven thousand ounces.

Red 5 managing director Mark Williams said while Darlot had weakened, operations just 100 kilometres north remained strong.

“Red 5 continues to make excellent progress on the King of the Hills gold project, however we continue to face challenges at our Darlot gold mine,” Williams said.

“The difficulty of sourcing skilled labour for both Darlot and for our new Great Western mine has impacted our ability to achieve our financial year 2021 production guidance.”

The 62,000 ounce Great Western mine was acquired by Red 5 last year in a $2.5 million deal, with plans to use it in expanding the Darlot mineral resource base 80 kilometres away.

The Great Western mine began production in the March 2021 quarter but has been unable to ramp up to full force as the shortage of machine operators and truck drivers hampered operations.

Red 5 expected the labour shortage to affect operations at the Darlot Mill in the 2022 financial year.

Red 5 also increased its all-in sustaining cost at Darlot from $2150 – $2280 up to $2240 – $2290 per ounce.

Despite the disruptions, Williams said King of the Hills remains well on track, as the up-and-coming operation nears commencement.

“As previously announced, King of the Hills remains on schedule and budget, and is expected to commence gold production in the June quarter of 2022,” Williams said.

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