King of the Hills Gold Mine explained

King of the Hills Gold Mine
Pushpin Map:Western Australia
Pushpin Label:King of the Hills Gold Mine
Pushpin Map Caption:Location in Western Australia
Coordinates:-28.6661°N 121.1669°W
Place:Leonora
Subdivision Type:State
State/Province:Western Australia
Country:Australia
Owner:Red 5 Limited
Acquisition Year:2017
Products:Gold
Financial Year:2022–23
Amount:102,574 ounces
Opening Year:1990
Active Years:1990–2005
2011–2016
2018–2021
2022–present
Module:
Stroke-Colour:
  1. C60C30
Stroke-Width:3
Marker:industrial
Marker-Colour:
  1. 1F2F57
Zoom:12

The King of the Hills Gold Mine, formerly the Tarmoola Gold Mine, is located 29 km north-west of Leonora, Western Australia. The mine was placed in care and maintenance from September 2004, when a pit wall failure forced its closure. It is owned by Saracen Mineral Holdings Limited.[1]

The Tarmoola mine was originally developed and opened in May 1990 by Mt Edon Gold Mines Australia NL. It is now known as King of the Hills, the original name for the area from its discovery in 1897, and is owned and operated by Saracen Mineral Holdings Limited. Saracen commenced underground mining operations at King of the Hills in July 2016,[2] [3] but sold the mine to Red 5 Limited. Red 5 constructed a new processing plant at the mine and re-commenced underground mining in late March 2022.

History

The mine, opened in May 1990,[4] was discovered and developed by Mount Edon Mines until April 1997,[5] when it was taken over by jointly by Camelot Resources and Teck Corporation through Reachwest Pty Ltd for A$158 million.[6]

Camelot Resources was renamed Pacmin Mining in June 1998[7] and took control of all assets of the two companies in Australia.[8] Pacmin was then taken over by Sons of Gwalia in October 2001 for A$210 million,[9] [10] the mine thereby becoming part of the company's Leonora operations, together with the Gwalia mine. This merger also secured the Carosue Dam mine for Sons of Gwalia.[11] [12]

In February 2004, a pit wall failure caused disruptions to the mine, leading to its eventual closure in September 2004.[1]

In retrospect, the purchase of Pacmin and Tarmoola was seen as very expensive, especially in the light of gold reserve write downs and operational difficulties at the mine.[13] [14]

Sons of Gwalia went into administration on 30 August 2004, following a financial collapse, with debts exceeding $800 million after suffering from falling gold reserves and hedging losses.[15] Sons of Gwalia was Australia's third-largest gold producer and also controlled more than half the world's production of tantalum.[16] At the point of closure, the mine had produced 1.65 million ounces of gold.

St Barbara purchased the mine from insolvent Sons of Gwalia in March 2005 but did not fully reopened the mine thereafter.[17] The company placed the mine on the market in 2007, seeing little value in operating the mine because of high costs of production. St Barbara estimated that it would cost A$700 per ounce to mine at Tarmoola, at an average grade of 1.1 g/t.[18] However, the sale of Tarmoola did not eventuate.[19]

St Barbara explored the option of underground mining at Tarmoola in 2009 and processing the ore at Gwalia.[20] Limited amounts of ore were extracted from the mine as a satellite operation by St Barbara and subsequent owners Saracen and Red 5, with St Barbara mining from 2011 to 2015 and Saracen in 2016 before suspending operations in January 2017. In August 2015, St Barbara announced the sale of the mine to Saracen Mineral Holdings for A$3 million.[21]

In August 2017, Red 5 Limited purchased the Darlot-Centenary Gold Mine from Gold Fields for A$18.5 million, A$12 million of this in cash and the remainder in shares and, at the same time, also purchased the King of the Hills Gold Mine from Saracens Mineral Holdings for A$15.5 million in cash and shares.[22]

Red 5 commenced mining at King of the Hills in early 2018, with ore transported to the Darlot process plant for processing until early 2021, when the company decided to preserve the mine's ore for its new plant.

With the completion of their new processing plant at the King of the Hills mine, Red 5 plans to close down the Darlot process plant in 2022 and instead process the ore from the Darlot's underground operations at the new facility. Red 5 spend A$226 million to redevelop the mine.[23]

On 31 March 2022, underground mining commenced at the mine with gold production scheduled to commence in the second quarter of the year.[24]

Production

Production of the mine:[25] [26] [27] [28] [29] [30] [31]

Year ProductionGradeCost per ounce
1995-9658,369 ounces
2000230,357 ounces2.27 g/tA$287
2001194,540 ounces1.80 g/tA$379
2002 150,484 ounces1.41 g/tA$375
2002-03 237,036 ouncesA$470
2003–04 165,802 ouncesA$476
2004–05
2005–2011inactive
2011–12
2012–13
2013–14
2014–15
2015–16
2016–17
2017–18 8,962 ounces
2018–19 40,099 ounces3.16 g/t
2019–20 38,075 ounces 2.71 g/t
2020–2021inactive
2021–229,545 ounces
2022–23102,574 ounces1.53 g/tA$1,837

Notes

References

Bibliography

External links

Notes and References

  1. http://www.stbarbara.com.au/fileadmin/user_upload/documents/annual-reports/2005_Annual_Report_1-36.pdf St Barbara annual report 2005
  2. Book: Fairclough. M.C.. Brown. J.C.. Berkman. Donald Alexander. Mackenzie. David H.. Geology of Australian and Papua New Guinean mineral deposits. 1998. Australasian Institute of Mining and Metallurgy. 978 1 875776 53 5. 173-178. 8 March 2017. Tarmoola Gold Deposit.
  3. Web site: Quarterly report: September 2016. Saracen Mineral Holdings Limited. 8 March 2017. pdf. 25 October 2016.
  4. http://www.goldinvest.de/public/data/documents/902820070220104447.pdf Klaus Eckhof - Project Geologist and Business Development Manager of Mount Edon
  5. http://www.deltacapital.com.au/executives.htm Mr Tony Brennan - Managing Director of Mount Edon Gold Mines Limited
  6. https://www.nytimes.com/1997/01/23/business/joint-takeover-bid-for-australian-mine.html?pagewanted=1 Joint Takeover Bid For Australian Mine
  7. http://www.acclaimexploration.com.au/projects_ta_jv.htm Tarmoola Joint Venture
  8. http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=text&issuerId=248&announcementId=604776 Establishment of Pacific Mining Corporation
  9. http://www.delisted.com.au/Company/6299/PACMIN%20MINING%20CORPORATION%20LIMITED PACMIN MINING CORPORATION LIMITED (PML)
  10. http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=text&issuerId=1167&announcementId=687628 Intention to Make Takeover Bid for PacMin Mining Corporation
  11. http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00386788 Sons of Gwalia annual report 2003
  12. http://minedexext.doir.wa.gov.au/minedex/external/common/appMain.jsp MINEDEX website - Tarmoola search result
  13. http://www.abc.net.au/insidebusiness/content/2004/s1192487.htm ASX to probe Sons of Gwalia collapse
  14. http://metalsplace.com/news/articles/129/gwalia-sweats-on-review/ Gwalia sweats on review
  15. http://au.news.yahoo.com/thewest/a/-/breaking/5912273/e-y-agrees-to-125m-sons-of-gwalia-settlement/ Ernst &Young agrees to $125m Sons of Gwalia settlement
  16. http://www.smh.com.au/articles/2004/09/03/1093939143587.html Sons of Gwalia's gold hedging had big holes
  17. http://www.corporatefile.com.au/documents/OB/MD%20CEO%20on%20Outlook%20&%20Strategy%2028.06.05.pdf St Barbara Mines Limited - Lodgement of Open Briefing
  18. http://www.smh.com.au/news/business/st-barbara-offloads-tarmoola-goldmine/2007/04/13/1175971360172.html St Barbara offloads Tarmoola goldmine
  19. http://www.theaustralian.com.au/business/st-barbara-considers-underground-gold-mine-at-tarmoola/story-e6frg8zx-1225795801237 St Barbara considers underground gold mine at Tarmoola
  20. http://www.stbarbara.com.au/our-operations/leonora/ St Barbara website - Leonora
  21. News: Lucas . Jarrod . 20 August 2015 . Saracen is King of the Hill . . 9 April 2022 .
  22. News: Beattie . Fraser . 3 August 2017 . Red 5 buys two gold mines . . 31 March 2022 .
  23. News: 9 September 2021 . How the $226m King of the Hills development will make Red 5 a mid-tier gold miner in 2022 . Resources Rising Stars . 31 March 2022 .
  24. News: Murphy . Emily . 7 April 2022 . Red 5 KOTH goes back underground . Australian Mining . 10 April 2022 .
  25. The Australian Mines Handbook: 2003-2004 Edition, page 128
  26. http://www.asx.com.au/asxpdf/20040714/pdf/3m4sxwd0q9cyf.pdf Sons of Gwalia fourth quarter report 2004
  27. Web site: 2018 Annual Report . www.asx.com.au . Red 5 Limited . 9 April 2022.
  28. Web site: 2020 Annual Report . www.asx.com.au . Red 5 Limited . 9 April 2022.
  29. Web site: 2021 Annual Report . www.asx.com.au . Red 5 Limited . 9 April 2022.
  30. Web site: 2022 Annual Report . www.asx.com.au . Red 5 Limited . 1 March 2023.
  31. Web site: 2023 Annual Report . www.red5limited.com . Red 5 Limited . 26 February 2024.