Source : THE AGE NEWS
By Andrew Todd
ASX listed Kaiser Reef has scooped up the profitable Henty underground gold mine in Tasmania in a synergistic deal with gold success story Catalyst Metals for a $31.6m upfront payment to become a multi-asset Australian gold producer. The company will now crank out over 30,000 ounces of gold a year as it charges towards its short-term goal of 50,000 ounces a year from its operations in Victoria and now Tasmania.
The company sealed the Henty acquisition by paying fellow ASX listed Catalyst Metals some $15M in cash and $16.6M in shares, handing Catalyst a maxed out 19.99 per cent stake in Kaiser.
ASX listed Kaiser Reef Managing Director Jonathan Downes (top, 2nd from left) channels the eighties by breaking out a couple of bottles of Pol Roger to celebrate the recent 98% shareholder vote in favour of raising $30m to part fund the purchase of a Tasmanian gold mine.
After 6 months in the drivers chair Kaiser will also pay another 50 ounces per month to Catalyst, capped at 3,000 ounces and a 0.5% royalty on gold produced from the Darwin Target Zone area only at Henty.
Notably, Henty is no dusty relic – it is a proven and profitable gold machine that has pumped out some 1.4 million ounces of gold at a cracking 8.9 grams per tonne (g/t).
Kaiser now has a plan to scrub the mine up and increase its underground development rate by 50 per cent using bigger trucks and increased work areas to name just two planned initiatives.
The company will use the mine as the third string in its bow in an attempt to replicate the mid-cap success stories of the Australian gold sector, including partners Catalyst and WA kin Ora Banda Mining, who have turned mothballed assets into billion dollar windfalls.
‘… The acquisition of the profitable Henty Gold Mine significantly strengthens our production base…’
Kaiser Reef managing director Jonathan Downes
Kaiser says that prior to acquisition, Catalyst had made substantial headway on improvements and investments at Henty, including resource drilling, tailings and an underground fleet at the mine that boasts a skilled workforce of over 150 people.
The project also has a 300,000 tonne per annum CIL plant on site, fully permitted through 2030.
The investments have left Kaiser what it says is a minimum readymade 5-year mine plan to exploit the current 4.1Mt resource grading some 3.4g/t for 449,000 ounces of gold, with considerable opportunities for near-mine expansion with scope to extend the current mine life.
Kaiser Reef managing director Jonathan Downes said: “We are delighted to officially welcome the Henty Gold Mine and its team into the Kaiser portfolio. The acquisition of the profitable Henty Gold Mine significantly strengthens our production base, provides compelling near-mine exploration opportunities, and establishes the Company as a leading high-grade gold producer in Australia.”
The deal now allows Catalyst to sharpen its focus on its mainland operations, including the potential to expand the now 50/50 joint venture (JV) at Kaiser’s Maldon processing plant in Victoria’s gold-soaked Bendigo-Ballarat goldfields.
The JV setup could supercharge processing capacity, letting Kaiser feed high-grade ore from its existing A1 gold mine while Catalyst channels material from its Four Eagles project north of Bendigo which boasts 70,000 ounces at a stonking 26g/t at Boyd’s Dam.
Kaiser bankrolled the deal to pick up Henty with a successful $30M placement following shareholders giving the thumbs-up earlier this month. It also locked down a $10M funding package from Auramet International and is now well placed in terms of working capital.
With more than 25-kilometres of Henty fault line screaming for more attention, that Darwin target zone could be just the tip of the iceberg at a gold mine with plenty of legs for expansion.
For Kaiser, Henty slots seamlessly into its high-grade playbook. Its A1 Gold Mine in Victoria holds its owned storied history of high-grade legend, dating back as far as 1861.
A1’s historical 800 ounces per vertical meter, with some levels cracking 1,000 ounces, puts it in elite company in the high-grade Victorian gold fields.
The Maldon JV down the road could prove the secret sauce for a reviving Victorian gold scene. The companies believe the 200,000tpa plant at Maldon could turn into a regional processing hub, handling A1’s high-grade ore and Four Eagles’ blockbuster grades.
With Henty’s more than 90 per cent recovery rate and stable recent cost base of just $2631/oz, the new acquisition should show solid margins for Kaiser. Throw in A1’s high-grade revival adding that extra spark and it may not be too long before Kaiser is replicating the success of fellow mid-tier gold players like its partner Catalyst or Ora Banda Mining.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
