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Red River Resources writes $21.1 million in receipts during September quarter

New Hillgrove gold mine owner Red River plans to spend $25.2 million in the December quarter as it ramps up the Far West base metals mine at Thalanga in Queensland.

Red River Resources Limited -
The Thalanga Operations had an EBITDA of $3 million in the September quarter
  • The debt-free company generated $21.1 million in revenues from customers in the September 2019 financial quarter as it spent a net $8.2 million on operations. 
  • Red River continued to hold a $10 million working capital facility in the period, leaving it undrawn. 
  • The Melbourne-based company plans to spend $25.2 million in the December 2019 quarter as ramp-up efforts continue at Thalanga operations in North Queensland. 
  • Red River ended September 2019 with $17.3 million cash and a $10 million working capital facility undrawn. 

Red River Resources Ltd (ASX:RVR) (FRA:R1R) hopes to advance its zinc-lead-copper-producing operations at Thalanga Zinc-Lead-Copper Project in North Queensland in the December 2019 financial quarter after snapping up the Hillgrove gold mine in New South Wales in August 2019.

The company, which released its quarterly results to market today, plans to ramp-up production at the Far West Zinc Mine at Thalanga on the prospective Mt Windsor Belt in the December 2019 quarter.

Underground development

Development at Far West underground mine continues and during the September quarter, there was 1,033 metres of lateral development and 164 metres of vertical development completed.

Total development has surpassed 3,477 metres, including 1,363 metres of decline development.

The Far West decline is at 198 metres vertical depth and has passed the 820 Level access as it continues downwards to the 800 Level Access.

Concentrate sales

Red River wrote $21.1 million in receipts from customers in the quarter, with $20.9 million of the revenue being from concentrate sales.

The company’s zinc concentrate production figure was 6,199 DMT in the period, while lead concentration production was 2,016 DMT and copper concentrate production was 1,372 DMT.

Red River had a $3 million EBITDA for its Thalanga operations for the September 2019 quarter and calculated cash costs for each pound of payable zinc metal produced in the period.

C1 costs were US$0.76 ($1.11) per pound of payable zinc metal while C2 costs were US$1.14 a pound and C3 costs were US$1.35 a pound.

September 2019 quarter cash burn came in at $8.2 million after the company paid a $4 million 2019 financial year royalty to the Queensland Government.

Payments will switch to quarterly from the December 2019 quarter onwards.

The debt-free Victorian company had a $10 million credit facility undrawn at the end of the September 2019 quarter.

Quarter highlights

Red River had a number of achievements in the quarter.

Among these were snapping up its new NSW gold mine acquisition Hillgrove for $4 million in an all-scrip transaction in late August 2019.

The company also enjoyed success in the field, intersecting high-grade thick shallow mineralisation while drilling its Liontown project, also on Mt Windsor Belt.

Red River ended September with $17.3 million cash and plans to spend $25.2 million in the December 2019 quarter.

The company has budgeted $900,000 for exploration and $13 million for production.

Quick facts: Red River Resources Limited

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