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Red 5 outlines A$218M initial capex for King of the Hills gold project

Red 5 Ltd.'s pre-feasibility study for its King of the Hills gold project in Western Australia outlined pre-production capital expenditure of A$218 million to build a new carbon-in-leach processing plant on-site with a capacity of 4 million tonnes per annum.

The project is expected to produce an average of 140,000 ounces of gold per annum over a mine life of 10 years, according to an Aug. 1 release.

All-in sustaining costs for the life of the mine are estimated at A$1,167 per ounce.

The study is based on a recently updated JORC 2012-compliant resource of 66.0 million tonnes at 1.5 g/t gold containing 3.11 million gold ounces.

Red 5's board approved the immediate start of the final feasibility study for the project, which will integrate the bulk open pit and underground mining operations together with satellite open-pit upside opportunities.

The feasibility study is scheduled to be complete by mid-2020 at an estimated cost of about A$4 million, which is in addition a 2020 geology budget for the project of about A$15 million. If the study is successfully completed on time, construction is expected to start in 2021, with initial production targeted for late 2021 or early 2022, Red 5 said.