Kaiser Reef’s Managing Director Jonathan Downes took to the stage at the RIU Sydney Resources Round-up in May with a confident message: the company has transformed into a multi-asset, cash-generative gold producer – and it’s just getting started.
In a presentation that framed the recently announced acquisition of the Henty Gold Mine as a “transformational” milestone, Downes laid out a pathway for Kaiser Reef (ASX:KAU) to more than double production and tap into a pipeline of high-grade assets in tier-1 jurisdictions.
“We’ve just purchased a very profitable gold mine,” Downes told attendees, referring to Henty, which was acquired from Catalyst Metals in a $31.6 million deal. Although the acquisition of the Henty Gold Mine had not yet formally concluded at the time of the presentation, the company presented its operational outlook on a pro forma basis, assuming the transaction’s completion.
Jonathan Downes
Three Mines, Two Mills, One Strategy
Kaiser now controls three gold mines – Henty, A1, and Maldon – and operates two processing plants in Tasmania and Victoria. On a pro forma basis, FY24 group production is estimated at 33,000oz, with near-term growth expected to exceed 50,000oz per annum as production ramps up at A1 and, eventually, Maldon.
At the core of this production story is Henty, located on Tasmania’s west coast. Once a flagship operation under Placer Dome and later Barrick, the mine has produced more than 1.4 million ounces at an average grade of 8.9g/t Au. Downes described the asset as being in its best shape “in over a decade” and noted that Catalyst’s work since acquiring it in 2021 has materially improved both the resource base and operational consistency.
“Catalyst entered in 2021 and they rolled up their sleeve and did a fantastic job of drilling, expanding that resource. They increased the resource substantially despite depletion and built a maiden five-year reserve,” said Downes.
With 154koz in reserves and 449koz in resources, Henty has a current mine life of five years, and a longer-term target to grow beyond ten years through in-mine and near-mine exploration.
Production and Cost Optimisation
The Henty plant is running at full capacity (300ktpa), but Downes flagged multiple optimisation initiatives to lift throughput and productivity without heavy capital outlay. These include:
SAG mill automation to lift processing efficiency by 10–15%
Increasing decline height to accommodate 40t trucks (up from 30t), targeting a 33% boost in haulage efficiency
Expanding underground development to enable more stoping fronts and improve flexibility
“Henty is a fixed-cost site,” Downes said. “Increased throughput will allow us to spread that cost over more tonnes and ounces.”
SAG mill at Henty site set for automation upgrade, aiming to boost processing efficiency by 10–15% and support increased gold production throughput.
The A1 Turnaround
Meanwhile, Kaiser is nearing an inflection point at its long-running A1 Mine in Victoria. After decades of remnant mining, the company has invested $25 million in new decline development, ventilation, and power upgrades to access the “Nova Zone” – a new area of virgin high-grade mineralisation.
“It's been remnant mining for the last 40 years… We've now drilled to the bottom,” Downes said. “We’re at the bottom of the J-curve and about to really start producing. This will be our second big engine.”
Drilling below Level 23 has returned intercepts such as 0.8m @ 32.7g/t Au and 0.2m @ 65.1g/t Au, underscoring the potential for higher-grade feed and a step change in production rates. Kaiser is targeting >34m vertical advance per year and aiming to lift A1’s output from <12kozpa historically to >20kozpa.
Maldon: High-Grade Sleeper
Maldon – situated between Ballarat and Bendigo – is on care and maintenance but represents an underexplored brownfields opportunity. Once one of Victoria’s richest mines, Maldon has produced over 2.1Moz at an average grade of ~28g/t. Despite its pedigree, there has been no drilling in some parts of the system since 1913.
“We now keep that mine dewatered with a decline that goes right through,” said Downes. “It’s open-ended with high-grade mineralisation… we see an easy target of about 500,000 ounces.”
A new underground drill program is targeting growth at Union Hill, where the company already has a 1.3Mt @ 4.4g/t Au inferred resource and a JORC-compliant exploration target of up to 345koz Au.
Kaiser’s Maldon processing plant, with a 200ktpa CIP capacity (expandable to 400ktpa), is also seen as a strategic asset in Victoria’s goldfields, offering third-party tolling potential and JV opportunities – particularly with Catalyst’s nearby Bendigo Gold Project.
Capital and Capability
Financially, the company appears well positioned. Post-transaction, Kaiser’s pro forma enterprise value sits at ~$76 million with $27 million in cash and $10 million in debt. At the current Australian gold price, Henty alone would have generated $50 million in free cash over FY24.
The company has also brought in Brad Valiukas as executive director and COO. Formerly head of technical services at Northern Star, Valiukas’ experience building and optimising underground operations is described by Downes as “beautifully applicable to what we’re trying to achieve.”
Outlook: Scaling Smart
With a portfolio of high-grade assets, full ownership of critical infrastructure, and a clear production growth path, Kaiser is angling to scale without overextending.
As Downes concluded, “Three mines, lots of cash, making lots of cash.”
The company’s next chapter will hinge on how swiftly it can convert exploration upside and mine development into higher throughput – all while maintaining its capital discipline in a gold market that continues to reward cost-conscious producers.
