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Murray Ward
Multi-asset gold producer Kaiser Reef Ltd looks set to turn its Henty processing plant in Tasmania into a regional toll treatment hub after striking a deal to potentially process ore for fellow ASX-listed explorer, Flynn Gold.
The two companies have executed a non-binding ore purchase agreement that establishes a framework for Kaiser to buy and process ore or concentrates from Flynn’s Tasmanian gold projects at its Henty gold mine processing facility.
The move provides Kaiser with a potential new low-capex revenue stream and an opportunity to eek out more income from its significant processing infrastructure in western Tasmania. For Flynn, it offers a potential shortcut to production without the hefty capital outlay of building a new plant.
The agreement applies to all of Flynn’s projects in the Apple Isle and provides a push for the explorer to accelerate development, including at its flagship Golden Ridge project where it recently applied for a mining lease.
While the commercial terms of the deal remain under wraps for now, it signals Kaiser’s intent to leverage its established position in the region. The Henty mine boasts a 300,000-tonne-per-annum processing plant and is underpinned by a 199,000-ounce gold reserve.
Henty sits in the heart of the richly endowed Mount Read volcanics belt, a geological sweet spot that has historically produced monsters like the Rosebery and Mount Lyell polymetallic mines. Henty has also seen an investment drive with $2.7 million poured into its tailings storage facility and a ROM pad expansion.
Henty is Kaiser’s production workhorse, churning out 5563 ounces of gold, up 8.4 per cent, for the June quarter. The company has reaffirmed its production guidance of 32,000 ounces for the coming financial year from Henty and its Maldon operations in Victoria.
While Henty provides the production muscle, Kaiser’s other major asset is the Maldon gold project in Victoria’s historic Golden Triangle, a region famous for its eye-watering historical grades. Maldon turned out a modest 437 ounces for the June quarter although that number is up 26 per cent and growing as the second processing shift at its Porcupine Flat plant began to find its rhythm. The Maldon field alone has a history of producing 1.75 million ounces at a stunning average grade of 28 grams per tonne gold.
The company is now busy preparing the Maldon mine for a full restart, with refurbishment of the Union Hill mine decline underway and drilling planned to follow. The company is also advancing the high-grade Nova zone at its A1 mine, 200 kilometres southeast of Maldon, which it successfully accessed late in 2024.
With a healthy $37.2 million in cash and bullion as of the end of June, Kaiser looks to be well-funded to execute its dual-pronged growth strategy in both Victoria and Tasmania.
The company’s direction is being steered by managing director Brad Valiukas, an old hand from Northern Star Resources. In a sign of confidence, Valiukas has been putting his money where his mouth is, making several on-market share purchases this year.
This latest deal with Flynn Gold might seem like an aside to its own production activities, however it could be a strategically important one. By opening its mill doors to a junior neighbour, Kaiser is potentially positioning Henty not just as a standalone mine, but as the central processing hub for western Tasmania. If it can get the model right, it could be a savvy way to generate additional cashflow and dominate processing in the region and Flynn Gold will be an excellent test case.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
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