Tag Archives: Red 5 Ltd

Red 5 taps Zenith Energy for hybrid power options at King of the Hills gold project

Red 5 Ltd has entered into a Power Purchase Agreement with a subsidiary of Zenith Energy Ltd that will see the growing Australia-based power producer build, own and operate approximately 30 MW of hybrid power generation capacity to service the needs of the King of the Hills (KOTH) project in Western Australia.

The power inputs as part of the BOO agreement comprise high efficiency reciprocating gas fuel power generation together with a 2 MW photovoltaic solar farm (an example from Zenith’s other work shown above) and a battery energy storage system.

Power supply to the site is planned to commence in the March quarter of 2022 with an initial term of 10 years. The contract includes provision for a potential future upgrade to the power station to support increased plant throughput beyond the initial planned 4 Mt/y run rate, Red 5 says.

Gas will be supplied from the Goldfields Gas Pipeline, 12 km west of the mine, under separate contracts, the company clarified.

Red 5 Managing Director, Mark Williams, said the award of the agreement marked another important construction milestone for the King of the Hills project while, at the same time, helping to achieve one of the company’s environmental, social and governance commitments to reduce the carbon footprint of the project.

“We are pleased to have signed the Power Purchase Agreement with Zenith, an experienced power producer which provided us with a compelling hybrid thermal and sustainable power solution that includes renewable energy,” he said. “Zenith’s combination of a gas and solar power station, supported by a battery energy storage system, provides the efficiency and stability required for the processing plant and infrastructure to enable King of the Hills to be a long-life, low-cost gold producer.”

The KOTH project is an open pit and underground gold deposit with a projected mine life of over 16 years. This could see the company produce 176,000 oz/y of gold over the first six years, according to a recent feasibility study.

MACA receives early call up for Red 5’s King of the Hills gold project

Red 5 Ltd says it has taken another key step towards the development of its King of the Hills (KOTH) project in Western Australia, after issuing a notice of award for the engineering, procurement and construction (EPC) contract and the bulk earthworks for the process plant to MACA Interquip.

The EPC contract and bulk earthworks – which encompass the KOTH processing facility, equipping of the bore fields, high voltage power distribution, workshop, warehouse and bulk earthworks – will be undertaken as a fixed‐price contract, Red 5 said.

The KOTH feasibility study outlined a 16-year life of mine plan from open-pit and underground mining, whereby the company would produce 176,000 oz/y of gold over the first six years. The capital cost came in at A$226 million ($158 million) and life of mine all-in sustaining costs were A$1,415/oz.

MACA Interquip, a multi‐disciplined mineral processing provider, has a strong track record of the construction of similar carbon‐in‐leach processing plants to the 4 Mt/y process plant planned at KOTH, Red 5 explained.

Following execution of the EPC contract, commitments to‐date for the KOTH project will total A$143 million, compared with the capital budget of A$155 million for these items – which represent 82% of the total capital budget for processing infrastructure of A$188 million (excluding owners costs and contingency).

Commitments made to date include:

  • Purchase of 240‐bed camp accommodation, water and waste water treatment plants and central facilities;
  • Design and construction contract for a 450‐person village;
  • 6 Mt/y gyratory crusher and 4 Mt/y SAG mill;
  • Early works agreement with APA Group for the gas pipeline lateral; and
  • EPC contract for the process facility and bulk earthworks.

Construction of the village commenced in October 2020 and is on track to be operational in February 2021. The process plant bulk earthworks (for which equipment will be mobilised) are scheduled to commence on December 1, 2020, pending the final remaining permit (currently on schedule).

The EPC contract provides for two phases. The first is limited to A$50 million and Phase 2 is for the remainder of the contract value, which will be released at the discretion of Red 5, based on the status of debt financing.

The notice of award provides for the immediate commencement of the design and procurement activities for the process plant as well as mobilisation of earthmoving equipment to site, Red 5 said. It, however, limits commitments to A$10 million and is an interim measure to allow the plant design and mobilisation for earthworks to commence immediately while the contract is executed.

Once executed, the value of these contracts, together with the purchase of the 6 Mt/y gyratory crusher and 4 Mt/y SAG mill (already awarded to MACA Interquip), is A$129 million.

The purchased long‐lead items of the crusher and mill are currently being transported, in preparation for the planned delivery to Australia late in the June quarter of 2021.

The company is currently calling tenders for both the open pit and underground mining contracts, the independent power producer contract and the supply of gas. These contracts are expected to be finalised in the coming months, it said.

Red 5 Managing Director, Mark Williams, said: “Our decision to award these key contracts and make commitments to significant long‐lead items prior to completing project debt funding reflects our confidence in the robustness of the King of the Hills project.

“Importantly, the commitments made to date are below budget for this stage of the KOTH project, and should give our stakeholders confidence that we are well on track to progress the development of this major project, with production planned to start in June quarter of 2022.”

Pit N Portal enters open-pit mining services space with Red 5 Great Western contract

Red 5 Ltd has reported an updated resource and maiden reserve estimate for the Great Western gold deposit in Western Australia, at the same time as confirming Pit N Portal, a division of Emeco, will contract mine the open-pit asset.

A satellite deposit located around 55 kms from Red 5’s Darlot gold mine and processing facility, Great Western now comes with a measured, indicated and inferred resource of 870,000 t grading 2.5 g/t Au for 70,300 oz of contained gold. The maiden proven and probable reserve totals 437,500 t at 2.5g/t Au for 35,424 oz of contained gold.

Based on a proposed mining rate of between 30,000-40,000 t/mth of ore, the open pit is expected to be completed over a period of around 13 months, with plans to then access the underground orebody via a portal at the base of the pit, Red 5 says.

The company expects to commence open-pit mining in January with Pit N Portal, with ore from the open-pit operation processed at the existing 830,000 t/y gravity and carbon-in-leach Darlot processing facility (pictured).

Red 5 says studies are already underway for the commencement of underground mining following completion of the open pit.

Steve Versteegen, CEO of Pit n Portal, said: “We are thrilled to be continuing our partnership with Red 5 on this project, and also entering the open-cut mining services space with a long-term customer.

“This project allows Pit N Portal to perform the open-cut operations for Darlot gold mine and provides an opportunity for Pit N Portal to continue with Red 5 when it reviews the potential for an underground option accessed via a portal at the base of the pit.”