Kaiser powers through July growing cash, gold bullion assets

West Australian

04-08-2025

Kaiser Reef has maintained its strong momentum through July, with growth in the company's cash and gold bullion assets from its Henty mine in western Tasmania and its A1 Victorian mining operation.
Management says production remained strong at Henty last month. The company's coffers were also bolstered by its A1 gold mine in Country Victoria adding gold ounces, while third-party ore purchase agreements further boosted performance.
Kaiser pulled in more than $10.1 million in free cash flow last quarter, after accounting for all expenses, seeing its bank balance balloon to a stellar $24.7 million at the end of June. In July, its cash and bullion stash grew to $30.7 million, before the company dipped into its pocket to pay a final $2.5 million royalty payment for the financial year to Mineral Resources Tasmania.
A $500,000 debt repayment followed during the month, leaving a still-considerable jump in its assets for the period.
Kaiser has significantly boosted revenue since assuming control of the recently purchased Henty mine, raking in an impressive $25.177 million for the June quarter.
The company first sat in the Henty driver's seat on May 15, steering the operation to produce solid results for the balance of the quarter. The company scooped up the profitable underground gold mine from $1.4 billion ASX-listed Catalyst Metals.
Management believes its recent quarterly financial report highlighted the payment of significant one-off costs related to the Henty acquisition, which may not have been fully appreciated by the market.
It says in addition to its cash build during the quarter, the company paid $1.3 million in brokers' fees for handling the capital raise, $500,000 in corporate advisory fees, $200,000 in legal fees, made a $1 million loan repayment to one of its funders, Auramet International, and paid $800,000 in Auramet establishment fees and costs for the purchase of put options.
The put options purchase was a requirement to secure its debt facility and have been fully paid, with the benefit of locking-in a guaranteed minimum price of $4400 per gold ounce.
Kaiser executed put options to cover 6000 ounces of gold, consisting of 750 ounces per month across eight months at $4400 per ounce. The 750 ounces represent about one-third of the company's targeted monthly production of 2000 ounces, providing for a strong and prudent price protection instrument.
Management has several options available due to the strong financial position it finds itself in. Debt reduction, share buybacks and the payment of dividends are all options. It says no decisions have been made on any potential action.
Kaiser plans to pump out more than 30,000 ounces of gold a year from Henty, 30 kilometres north of Queenstown, as it aims to reach its stated goal of producing a total 50,000 ounces a year from its Tasmanian and Victorian operations.
The company acquired the potential company-making Henty project by agreeing to pay Catalyst $15 million in cash and $16.6 million in shares, handing Catalyst a maximum 19.99 per cent stake in Kaiser.
After being in control of the operation for six months, Kaiser will further pay Catalyst 50 ounces of gold per month capped at 3000 ounces and a 0.5 per cent royalty on gold produced from the Darwin Target Zone.
The company produced 4069 ounces of gold at Henty from May 15 to June 30, generating revenue of $21.205 million from the Tassie mine, against operating costs of just $10.147 million, highlighting the possibilities for future profitable operations at the site. All-in sustaining costs totalled $2951 per ounce of Tassie gold.
Kaiser also holds the strategic Maldon processing plant, which produced 756 gold ounces from mining at its existing A1 gold mine, 120km east-northeast of Melbourne.
Kaiser and Catalyst have forged an agreement for a 50/50 joint venture at Kaiser's Maldon processing plant, providing both companies with an opportunity to lift production ounces.
The JV allows for Catalyst to co-develop the plant, which is strategically placed between Victoria's gold-rich regions around Bendigo and Ballarat.
Increasing the capacity of the Maldon plant could fire up both firms' processing plans, allowing Kaiser to feed gold-bearing ore from its existing A1 gold mine.
Meanwhile, Catalyst could send material into the plant from its Four Eagles project north of Bendigo, which has 70,000 ounces gold at an eye-opening 26 grams per tonne (g/t) in its Boyd's Dam project.
Kaiser now has a five-year mine plan for Henty, based on a current mineral resource of 4.1 million tonnes at 3.4g/t gold for 449,000 ounces. This is supported by current ore reserves of 1.2Mt going 4g/t for 154,000 ounces of gold.
The mine has historical production of 1.4 million ounces at an impressive 8.9g/t gold.
Kaiser will benefit greatly from Catalyst's recent investment in drill platforms, tailings facilities and underground fleet equipment before the sale took place.
Kaiser believes Henty also has tremendous scope for near-mine exploration and development success, aided by some significant infrastructure, including underground and surface workshops, an administration complex and a coveted 300,000t-per-annum carbon-in-leach processing plant. The plant is fully permitted to 2030.
The mine comes with the twin benefits of hydro-generated grid power and renewed tailings storage capacity.
Kaiser jumped on the deal to pick up Henty with a successful $30 million share placement, in addition to a $10 million funding package from Auramet. There remains $2 million in undrawn funds. Combined with its solid bank balance, it is well-placed for working capital.
Kaiser appears to be pumping out cash and bullion at a more than healthy rate since strapping itself in at Henty. It will be hoping the good times and today's high gold price continue.
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