Red 5 continues to rapidly advance its A$226 million King of the Hills gold development towards first production.
Chairman Kevin Dundo told shareholders last month that the project, near Leonora in Western Australia, was 73% complete.
Installation of the processing plant is nearing completion and all long-lead items have been delivered to site.
The project remains on budget with $118.2 million spent at the end of September.
The majority of remaining project expenditure is through fixed-price contracts, shielding Red 5 from inflationary pressures.
KOTH remains on schedule to pour first gold in the June 2022 quarter, which is no mean feat considering WA is experiencing one of the worst labour shortages in history.
"Our ability to keep the project on time and budget - despite the impact of the ongoing COVID-19 pandemic and the increasingly tight supply of labour, services and equipment across the Western Australian mining sector - is thanks to the diligent work of our executive team led by managing director Mark Williams and project manager Warren King together with our construction contractor, MACA Interquip," Dundo said.
"It is also due to the decision we took last year to undertake a landmark $125 million capital raising, at the height of the first wave of the COVID-19 pandemic.
"This gave us the balance sheet strength to press ahead with the final feasibility study, secure long-lead items of equipment, recruit high-calibre people and initiate the development well ahead of the recent wave of cost escalation and labour shortages we have seen in the West Australian resource sector."
KOTH has a resource of 4.12 million ounces and reserves of 2.4Moz, making it Australia's ninth-largest gold deposit and giving it a standout mine life of 16 years.
Based on the Project's Feasibility Study published in 2020, the operation is expected to produce 176,000 ounces of gold at all-in sustaining costs of $1339 per ounce over its first six years.
Using a gold price of $2500/oz, the project is expected to generate post-tax free cashflow of $144 million per year in the first six years.
The project has a net present value of $726 million, an internal rate of return of 49.82% and a payback period of 25 months.
Red 5 also owns the nearby Darlot mine, which will be transitioned next year to a high-grade feed source for the 4.7 million tonne per annum KOTH plant.
FY22 guidance for Darlot is 62,000-72,000oz at AISC of $2300-2400/oz, including $220/oz of mine development costs, but placing the Darlot plant on care and maintenance next year should reduce Darlot's AISC to $1700-1900/oz from FY23.
Red 5 recently completed the sale of its Siana gold project in the Philippines, realising US$19 million in up-front cash proceeds.
The sale removed annual holding costs of $6 million. Red 5 will retain exposure to the project via a net smelter return royalty.
