Kaiser Reef Faces Operational Challenges as It Scales Up Production and Cuts Debt

Strong Production and Reserve Growth at Henty

Kaiser Reef Limited (ASX, KAU) has delivered a solid performance for the December 2025 quarter, highlighted by strong gold production and a significant increase in reserves at its flagship Henty Gold Mine in Tasmania. The company produced 6,946 ounces of gold and 6,526 ounces of silver at Henty, marking its second full quarter under Kaiser’s ownership. This output supports the company’s target of consistent production exceeding 30,000 ounces of gold annually from FY 2026 onwards.

Crucially, Kaiser reported a 29% increase in Henty’s gold reserves, now estimated at 199,000 ounces at a grade of 3.28 grams per tonne. This uplift extends the mine life beyond six years and underpins the company’s confidence in sustained production growth. The mineral resource estimate remains steady at 438,000 ounces, reinforcing the mine’s long-term potential.

Operational Enhancements and Exploration Success

Operationally, Henty’s processing plant throughput was tested at up to 400,000 tonnes per annum, a 33% increase over its nominal capacity, achieved without major infrastructure changes. Ongoing upgrades and fine-tuning of the processing circuit are expected to yield further improvements.

Meanwhile, at the Maldon Gold Project in Victoria, Kaiser completed two drilling campaigns, including a significant in-pit diamond drilling program at the Union Hill Open Pit targeting the Eaglehawk Reef. The drilling confirmed grade continuity and identified high-grade gold mineralisation, supporting future underground exploration and mining. The company also completed a comprehensive waste dump drilling program, with assay results pending, which could unlock additional processing feed.

Financial Strength and Corporate Developments

Kaiser’s financial position strengthened markedly, with cash reserves increasing by A$13.7 million to A$43.1 million by quarter-end. This improvement was supported by robust underlying cash flow of A$15.9 million before certain costs and investments. The company is actively reducing its gold loan exposure to Auramet International Inc, with only 1,040 ounces outstanding and two remaining call options to be exercised by March 2026, after which Kaiser will be fully exposed to gold price movements.

On the corporate front, Kaiser appointed Brad Valiukas as Managing Director, succeeding founder Jonathan Downes. Valiukas brings extensive operational expertise from senior roles at major ASX-listed mining companies, signalling a focus on operational excellence and growth.

Other Operational Notes

The A1 Gold Mine in Victoria was placed into care and maintenance during the quarter, with workforce redundancies and equipment relocated to support activities at Union Hill. Safety and environmental standards were maintained across operations, with no lost time injuries reported at Maldon and only one at Henty, which is under a return-to-work program.

Looking ahead, Kaiser is progressing infrastructure projects such as tailings storage facility expansions at both Henty and Maldon, positioning the company for increased throughput and longer mine life. The company’s strong balance sheet, combined with its exploration pipeline and operational improvements, positions it well to capitalise on the current favourable gold price environment.