Red 5 Limited (ASX: RED) has commenced mine planning studies as part of its ongoing Final Feasibility Study (FFS) for an integrated bulk open pit and underground mine and processing operation at the King of the Hills (KOTH) gold project in Western Australia.
The company said the FFS remains on-track for completion in the September 2020 Quarter on the back of the recently updated March 2020 KOTH Mineral Resource estimate completed.
Managing Director, Mark Williams, said this is an exciting time for the company as it moves into the final key stages of the FFS, paving the way for the development of one of Australia’s premier gold development projects.
Consultants are now undertaking mine planning studies for the Open Pit (SRK) and Underground (Entech), while mineral Resource model estimates for the satellite deposits are being reviewed and assessed for consideration as early oxide feed for the start-up phase of the planned KOTH bulk open pit mine.
The FFS mine designs and schedules are expected to be completed in June 2020.
Red 5 has also received non- binding proposals have been received from several West Australian open pit mining contractors, which align with the PFS mining costs.
An initial organisational review and recruitment drive has commenced for a Red 5 fit-for-purpose Open Pit Mine Planning Team in preparation for the commencement of mine pre-strip activities in 2021.
RED 5 has received Expressions of Interest (EOI) from major independent power producers for the provision of energy requirements on a Build-Own-Operate contractual basis.
The 20-25MW power plant design process includes evaluation of the use of renewable energy to complement a gas-fired power station supplied from the nearby Goldfields Gas Pipeline. Specialist engineering consultant Petro Min Engineers (PME) is assisting Red 5 in evaluating these proposals, which indicate pricing similar to the Pre-Feasibility Study cost estimates.
Mr Williams said there had been strong progress across multiple work-streams for the KOTH Final Feasibility Study over recent weeks, with several key items on track for completion next month and the overall FFS on track for completion next quarter.
“We continue to make solid progress towards our objective of delivering the FFS, making a final investment decision and starting construction on one of Australia’s premier new mid-tier mining projects at King of the Hills.
“In addition to boosting KOTH’s satellite deposit Mineral Resources to over 300,000oz, the completion of these Mineral Resources estimates has allowed our team to commence mining studies for the inclusion of these deposits in our overall mine plan and schedule.
“On other fronts, Pre-Feasibility pricing estimates for open pit mining costs and our energy requirements on the proposed “Build Own Operate” basis have been confirmed by Expressions of Interest from mining contractors and indicative proposals received from energy suppliers.
“We have also completed a work programme to drill and assay the low-grade stockpiles present on the KOTH site, with a view to including these in future Mineral Resource models and, ultimately, in our mine plan.
“Early works design and procurement activities are also well underway and proceeding well under the supervision of our new Construction Manager, who is now firmly embedded in the Red 5 team.”