21/05/2021 - 13:00

Red 5 hit by labour shortages

21/05/2021 - 13:00

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Red 5 has downgraded its full-year production guidance for the Darlot goldmine in WA, citing lower-than-expected output due to labour shortages.

Red 5 hit by labour shortages
Red 5 has experienced a shortage of machine operators and truck drivers for its Darlot operation. Photo: Red 5

Red 5 has downgraded its full-year production guidance for the Darlot goldmine in Western Australia, citing lower-than-expected output due to labour shortages.

Darlot, located in the Eastern Goldfields, is now expected to deliver between 74,000 ounces and 78,000oz of gold in the current financial year, down from Red 5’s previous 80,000-85,000oz forecast.

All-in sustaining costs (AISC) are expected to be between $2,240/oz and $2,290/oz compared with $2,150-2,280/oz.

Red 5 said labour availability at both the Darlot mine and Great Western satellite deposit - where mining commenced earlier this year - was continuing to affect production.

The company revealed a shortage of machine operators and truck drivers meant that its contractor, Emeco subsidiary Pit N Portal, was unable to ramp up mining activities at the planned rate.

This has delayed the delivery of higher-grade ore to the Darlot mill into FY22, Red 5 said.

Red 5 managing director Mark Williams said the company continued to face challenges at Darlot.

“The difficulty of sourcing skilled labour for both Darlot and for our new Great Western mine has impacted our ability to achieve our FY21 production guidance,” he said.

Pit N Portal secured the Great Western contract in October last year, marking its first open cut mining project.

Red 5 is undertaking a review of the broader Darlot operations and will provide a production and cost guidance for FY22 in the September quarter.

Meanwhile, the company has made strong progress on the development of its King of the Hills underground mine near Leonora, Mr Williams said.

KOTH is a proposed bulk mining operation expected to produce an average 176,000oz per annum throughout a 16-year operating life, according to a final feasibility study released last year.

Ore produced from the mine will be trucked to the nearby Darlot processing plant.

Mr Williams said KOTH remained on schedule and budget, with first production expected in mid-2022.

Shares in Red 5 were down 14.4 per cent on Friday’s news to trade at 17 cents, as at 2:31pm AEST.

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