Kaiser Reef’s Reserve Increase Raises Questions on Production and Market Risks
Kaiser Reef Limited has announced a significant 29% increase in Ore Reserves at its Henty Gold Mine in Tasmania, extending mine life beyond six years and targeting annual production above 30,000 ounces of gold.
- Ore Reserves increased by 29% to 199,000 ounces
- Mineral Resource steady at 438,000 ounces at 3.3 g/t gold
- Mine life extended to over six years with production ramp-up planned
- Second underground diamond drill rig deployed for exploration
- Processing plant capacity being increased to remove bottlenecks
Reserve Growth and Operational Outlook
Kaiser Reef Limited (ASX, KAU) has delivered a robust update to its Mineral Resource and Ore Reserve estimates for the Henty Gold Mine, located in Tasmania’s West Coast near Queenstown. The company reported a 29% increase in Ore Reserves to 199,000 ounces of gold, up from the previous 154,000 ounces. This uplift reflects an updated reserve of 1.89 million tonnes at a grade of 3.28 grams per tonne (g/t) gold, underpinning an extended mine life beyond six years.
The Mineral Resource remains steady at 438,000 ounces at 3.32 g/t gold, supported by extensive drilling data and advanced geological modelling. The steady resource base combined with the reserve increase signals a strengthened foundation for sustained underground mining operations.
Exploration and Production Enhancements
Kaiser Reef has intensified its exploration efforts by commissioning a second underground diamond drill rig dedicated to resource extension and infill drilling. This move aims to unlock further upside potential within the Henty deposit, which comprises multiple high-grade lenses hosted in quartz-sericite altered volcaniclastic rocks.
On the production front, the company is focused on increasing the processing plant throughput, which currently has a nameplate capacity of 300,000 tonnes per annum. By removing bottlenecks in the decline and upgrading equipment, Kaiser Reef targets consistent annual gold production exceeding 30,000 ounces, with growth anticipated through fiscal year 2026.
Technical Rigor and Economic Viability
The updated estimates comply with the JORC 2012 Code and are based on a comprehensive dataset including over 7,300 diamond drill holes and more than 65,000 meters of sampling. Kaiser Reef employed sophisticated estimation techniques such as Categorical Indicator Kriging to manage the complex spatial variability of gold grades within the deposit.
The Ore Reserve estimate assumes a cut-off grade of 2.0 g/t gold and incorporates realistic modifying factors grounded in current operational performance, including a metallurgical recovery rate of 87%. Economic assumptions use a gold price of AUD 4,000 per ounce and account for royalties and operating costs, confirming the continued economic viability of the Henty mine.
Environmental and Infrastructure Status
All necessary environmental approvals remain in place, with ongoing monitoring ensuring compliance. The tailings storage facility has approval for further expansion, supporting production through to 2030. Kaiser Reef’s operational infrastructure is fully established, providing a solid platform for the mine’s extended life and production ramp-up.
Managing Director Brad Valiukas highlighted the company’s commitment to transforming Kaiser Reef into a profitable gold producer, leveraging Henty’s solid production and cash flow base to build future growth.
Bottom Line?
Kaiser Reef’s reserve growth and operational upgrades position Henty as a cornerstone asset, but execution on exploration and processing expansion will be key to sustaining momentum.
Questions in the middle?
- How will the increased processing capacity impact production costs and margins?
- What are the prospects for converting inferred resources into reserves with ongoing drilling?
- How might gold price fluctuations affect the economic assumptions underpinning the reserve?