Vault Minerals Advances KoTH Upgrade Amid Strong Q3 Gold Output
Vault Minerals reported robust March quarter results with 87,110 ounces of gold produced and significant progress on the King of the Hills plant upgrade, underpinning its medium to long-term growth strategy.
- Q3 gold production of 87,110 ounces at AISC of A$2,553/oz
- Year-to-date production of 282,526 ounces with sales exceeding production
- King of the Hills stage 1 plant upgrade underway, targeting increased throughput
- Strong exploration results at KoTH underground and Darlot suggest life of mine extensions
- Cash and bullion rose to A$624.5 million with underlying free cash flow of A$51.7 million
Quarterly Performance and Financial Strength
Vault Minerals Limited (ASX: VAU) has delivered a solid March 2025 quarter, producing 87,110 ounces of gold and selling 89,827 ounces at an average realised price of A$3,812 per ounce. The all-in sustaining cost (AISC) stood at A$2,553 per ounce, reflecting ongoing operational efficiencies despite elevated waste stripping activities. Year-to-date production reached 282,526 ounces, with sales slightly ahead at 289,256 ounces, underscoring strong operational execution.
Financially, Vault strengthened its position with cash and bullion increasing by A$48.9 million to A$624.5 million, excluding gold in circuit and concentrate. The company generated an underlying free cash flow of A$51.7 million for the quarter, even after investing A$58.6 million in growth capital, including exploration and infrastructure upgrades.
Operational Highlights Across Key Regions
At Mount Monger, production was 18,081 ounces with an AISC of A$2,926 per ounce, impacted by non-cash inventory charges and ongoing waste stripping at the Santa Open Pit Complex. The French Kiss deposit is poised for a yield phase in Q4, with expected grade increases of over 110% and reduced material movements, signaling a potential step change in output.
The Deflector Region maintained steady production with 23,349 ounces of gold and 132 tonnes of copper, achieving an AISC of A$2,595 per ounce. Notably, mine production has consistently outperformed Ore Reserve estimates, positioning Deflector for a strong second half of FY25. Development of the Spanish Galleon mine commenced, with first ore expected in Q1 FY26, adding to the region's production profile.
Leonora operations produced 45,680 ounces at an AISC of A$2,380 per ounce. The King of the Hills (KoTH) open pit saw a 26% increase in ore production and a 17% rise in mined ounces quarter-on-quarter, driven by improved access to higher-grade ore blocks. Underground production was lower due to scheduling and equipment availability, but overall throughput increased, supporting the quarter’s output.
Growth Initiatives and Exploration Success
Vault is advancing the KoTH stage 1 plant upgrade, with earthworks and crusher box cut excavation underway. This upgrade aims to increase throughput capacity within 12 months, reducing unit processing costs and supporting medium to long-term growth. Concurrently, exploration drilling at KoTH underground and Darlot has returned high-grade intersections well beyond current Ore Reserve limits, suggesting potential life of mine extensions.
At KoTH, notable drill results include intercepts such as 3.8m at 30.1 g/t and 3.4m at 26.2 g/t gold, while Darlot drilling highlighted intervals like 5.2m at 11.7 g/t and 15.8m at 3.9 g/t. These results underpin plans to mobilise a second underground drill rig to Darlot, increasing exploration intensity. Surface drilling at Sugar South continues to reveal shallow, high-grade mineralisation, with assays including 2.44m at 119 g/t gold, reinforcing the district’s exploration upside.
Strategic Outlook and Guidance
Vault maintains its FY25 gold sales guidance of 390,000 to 410,000 ounces at an AISC range of A$2,250 to A$2,450 per ounce. The company is also progressing studies for a larger KoTH open pit scenario and an accelerated stage 2 plant expansion, which could bring forward production and reduce costs. These initiatives align with the expiry of the current mining contract in December 2026, offering operational flexibility.
Permitting efforts continue for the Southern Tailings Management Facility at Sugar Zone, which is critical for sustaining operations beyond the current tailings capacity. Vault’s integrated asset base, formed through the merger of Red 5 and Silver Lake Resources, combined with a strong balance sheet, positions it well to capitalise on gold price strength and volatility.
Bottom Line?
Vault Minerals’ strong quarterly results and strategic upgrades set the stage for accelerated growth, but execution risks and hedge book dynamics warrant close investor attention.
Questions in the middle?
- How will the accelerated KoTH stage 2 expansion impact production and costs beyond FY25?
- What is the timeline and risk profile for permitting and constructing the Southern Tailings Management Facility?
- How will ongoing hedge deliveries at below-market prices affect Vault’s future cash flow and price exposure?