Kaiser moves to fully unhedged gold production setting
Brought to you by BULLS AND BEARS
Craig Nolan
Kaiser Reef has given up final delivery capped gold at a predetermined price of A$5,300 per ounce and is now in the enviable position of benefiting entirely from the spot price for future production.
Having agreed to acquire the underground Henty Gold Mine in Tasmania in May last year, the highly cash-flow positive mine was initially secured with the help of funder Auramet International and a $30 million capital raise.
Auramet has moved to raise $10 million through a mix of secured and unsecured financing, including a monthly agreement to provide a call option on 1000 gold ounces with a strike price of AU$5300 per ounce, delivered to Auramet for a period of six months.
This helped Kaiser maintain a strong working capital position, allowing it to roll up its sleeves and embark on plans to ramp up production at Henty at full throttle.
With the last 1000oz package delivered to Auramet at the end of February, the company was again fully exposed to the unhedged gold price, which currently stands at A$7570 (US$5350) per gold ounce.
‘Upon completion of the acquisition of Henty in May 2025, Kaiser has transformed into a profitable gold miner.’
Kaiser Reef General Manager Brad Valiukas
Kaiser also reduced the gold credit to just 832 ounces, with eight monthly repayments of 104 ounces scheduled to completely eliminate the obligation by the end of October.
The company’s decision to secure the underperforming Tassie underground gold mine has been an excellent strategic move, with cash flow from production providing a solid boost to its bank account and overall financing position.
Kaiser’s last quarterly report for December highlighted a significant increase in its cash balance of $13.7 million, even after taking into account the $3.3 million impact from selling gold at a discounted price of A$5,300 per ounce under the price cap regulation.
Kaiser Reef general manager Brad Valiukas said: “Upon completion of the acquisition of Henty in May 2025, Kaiser has transformed into a profitable gold miner with a solid balance sheet and a strong pipeline of exploration and development opportunities.”
Valiukas said Auramet’s support during the acquisition significantly prevented equity reduction, and with the final delivery of call options, the company is in a strong position to further strengthen the balance sheet.
The company last month announced plans to use ongoing cash carry, optimize site production and access high-grade ore by opening additional stops to increase production at Henty by 16 per cent and achieve an impressive 35,000 ounces of gold from 2027.
Henty’s underground mine has an existing mineral resource of 4.11 million tonnes grading 3.32 grams of gold per ounce per tonne (g/t) of 438,000 tonnes. It has mineral reserves of 1.89 million tonnes, including 3.28 g/t gold for 199,000 ounces.
Although the mine was originally planned to have a five-year mine life, it has consistently blown forecasts, producing an impressive 1.3 million ounces of the precious yellow metal since 1996.
Kaiser also plans to restart the Victoria Maldon operation, reopen the Union Hill underground mine and process low-grade stock. An expected increase in production ounces is also expected from the processing of gold from former landfills located near the Union Hill mine.
In the trial process of the waste, an average of 1.6 g/t gold was obtained from a large ore sample of 3,567 tons, achieving 90 percent recovery.
The Maldon project comes with a fully operational gold processing plant with a capacity of 200,000 tonnes per annum to process incoming cargoes.
Remarkably, historic production from the project pumped a stunning 28 grams/t gold.
With plans for a two-pronged approach to maximize ounce gold production back on the table, Kaiser looks to have a solid one-two punch combination on its hands, with high-quality Tassie and Victorian operations ready to pump gold.
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