viewRed River Resources Limited

Red River Resources progressing strategy to restart production at Hillgrove Gold Project

The company's revenue during the December quarter was $12.2 million and RVR holds $12.9 in financial assets.

Red River Resources Limited - Red River Resources re-starts Hillgrove Gold Mine Re-start strategy ahead of production
Hillgrove Gold Mine showing processing infrastructure and layout

Red River Resources Ltd (ASX:RVR) continues to advance toward restarting production at the Hillgrove Gold Project near Armidale, New South Wales.

During the December quarter, the company focused on its restart strategy at the mine which included the undertaking of metallurgical work on representative samples from the Bakers Creek Waste Dump to confirm the optimal flow sheet to maximise gold recovery.

The 423 kilograms of samples collected from the waste dump returned a weighted average grade of 3.0 g/t gold with further results expected shortly.

The NSW gold-antimony project, which was purchased for $4 million in July 2019, has had $180 million invested previously in the project infrastructure.

This infrastructure comprises the existing processing plant, surface infrastructure, underground development, resource definition drilling and underground mining fleet.

Production at Far West continues

Red River’s Thalanga project comprises five base metal deposits including the Far West Mine, West 45, Liontown and Waterloo in central Queensland.

The company began production from the West 45 deposit in 2017, with ore for the Thalanga operation being sourced from the West 45 and Far West underground mines. 

Red River has plans to develop the Liontown and Waterloo deposits in order to extend the future Thalanga operational life. 

The company continued to invest in the development of the Thalanga Far West Mine throughout the quarter with 1,112 metres of lateral development.

This included the Far West decline development of 288 metres, vertical development of 14 metres, total ore development of 510 metres and other waste development of 314 metres.

The total development to date was 4,604 metres including 1,651 metres of decline development at quarter-end.

Mined ore production from Far West continues to ramp up despite production issues throughout the quarter.

Contractor engaged

Thalanga Operations quarterly mine ore production was 60,000 tonnes at 1% copper, 1.2% lead, 3.5% zinc, 0.2 g/t gold and 38 g/t silver.

Thalanga processed 66,000 tonnes of ore grading 0.8% copper, 1.3% lead, 3.5% zinc, 0.2 g/t gold and 40 g/t silver.

Production during the quarter was negatively impacted by delays in the ramp-up of mining operations at Far West, the main ore source for the quarter.

Red River is working with mining contractor PYBAR to bring ore production levels at Far West to the design 30,000–40,000 tonnes per month production levels.

Mining activities at West 45 continued to reduce and mining is now expected to cease during Q3 FY20 when West 45 will be placed on care and maintenance.

Copper maintains high level

Zinc concentrate production decreased from Q1 FY20, with 3,781 dry metric tonnes (DMT) of zinc concentrate produced.

Lead concentrate production fell from Q1 FY20, with 876 DMT lead concentrate produced, and copper concentrate production rose 14% from Q1 FY20 with 1,560 DMT copper concentrate produced.

Zinc recovery to zinc concentrate averaged 85.8% for the period and a high-quality zinc concentrate grading 52.5% was produced.

Lead recovery to lead concentrate reduced to 58.8% due to issues treating transitional ore from the upper levels of West 45, but Thalanga Operations continued to produce a high-quality lead concentrate with an average concentrate grade of 56.5% lead, 4.9 g/t gold and 1,413 g/t silver produced during the period.

Copper recovery to copper concentrate continued to maintain the high levels of the previous quarter, with an average recovery of 70.8% during the quarter to a high-quality copper concentrate grading 24.8% copper, 2.2 g/t gold and 423 g/t silver.

Thalanga Operations financial summary

Revenue during the quarter was $12.2 million, $8.7 million lower due to lower sales volumes being partially offset by the higher metal prices.

Operating costs were also $1.1 million lower with reduced variable mining and processing costs as a result of lower tonnes mined and treated.

At the end of the quarter, Red River had $12.9 million in financial assets.

Quick facts: Red River Resources Limited

Price: 0.049 AUD

Market: ASX
Market Cap: $25.3 m

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