Tassie, Vic gold output clears Kaiser Reef debt as cash hits $40M

Dual-asset gold producer Kaiser Reef has wiped a key debt from its books after a solid September quarter, a move expected to unchain about $600,000 a month in operating cash flow.

The company banked 6263 ounces of gold during the period, boosting its cash and bullion balance to a healthy $40 million and allowing it to fully repay the senior secured gold loan used to acquire its flagship Henty gold mine in Tasmania.

Production from the company’s two Australian assets continued to build momentum during the period, with total gold output rising to 6263 ounces from 6000 ounces in the prior quarter. The cornerstone Henty mine churned out 5692 ounces of gold and a further 5259 ounces of silver, while its Maldon project in Victoria chipped in another 572 ounces of gold. Impressively, the Maldon operation has now lifted its output for three consecutive quarters, jumping 65 per cent since March.

‘We head into the December quarter with a fully funded balance sheet and clear operational priorities at both assets.’

Kaiser Reef managing director Brad Valiukas

Total production generated an underlying cash flow of $5.6 million for the quarter, which more than covered $2.8 million in debt and deferred payments, allowing Kaiser to increase its net cash and bullion position by a hefty $2.8 million.

The strong financial position enabled the company to make a final delivery of 104 ounces of gold in October, wiping the slate clean on the 1872-ounce Auramet gold loan. With that facility retired, Kaiser’s only remaining gold delivery obligation is a deferred payment to Catalyst Metals as part of the Henty acquisition, requiring 50 ounces per month through to October 2030. However, the company says repaying the principal acquisition loan from the mine’s own cash flow is an important milestone.

Kaiser Reef managing director Brad Valiukas said: “Kaiser delivered 6263oz of gold across Henty and Maldon during the quarter, while increasing cash and bullion to A$40 million, paying down debt and advancing Maldon. We have completely repaid the Auramet gold loan, on schedule, with the final delivery made in October. The gold loan helped us acquire Henty, and repaying it from Henty’s own cash flow is an important milestone for Kaiser.”

The impressive quarterly report further underscores a remarkable full-year turnaround for Kaiser, which swung from a $20.24 million statutory loss in FY2025 to a $16.8 million after-tax profit in FY2026, backed by an impressive $44.7 million cash inflow from operations.

The Henty mine, nestled in Tasmania’s richly endowed Mount Read Volcanics belt alongside the legendary Rosebery and Mount Lyell operations, remains the company’s gold-producing workhorse. A recent resource and reserve update effectively offset mining depletion, maintaining the mine’s ore reserve at 198,000 ounces of gold and its overall resource at 429,000 ounces. In a shrewd move to sweat its assets, the company is also working with fellow ASX-lister Flynn Gold to process its ore through Henty’s 300,000-tonne-per-annum processing plant. As part of the expansion plan, Kaiser has applied to increase its tailings capacity by two million tonnes.

While Henty provides the cash flow, Kaiser’s Maldon operation in Victoria’s fabled Golden Triangle offers a significant high-grade growth opportunity. The project, with a strong track record of producing 1.75 million ounces at a staggering 28 grams per tonne (g/t) gold, is anchored by the fully permitted 200,000-tonne-per-annum Porcupine Flats processing facility. Its Union Hill deposit hosts an inferred resource of 187,000 ounces grading a solid 4.44g/t gold, with site stockpiles adding a further 11,700 ounces.

All up, the company’s global resource stands at 5.53 million tonnes grading 3.46g/t gold for 615,000 ounces. With FY27 total production targeted at around 32,000 ounces and no hedging in place, the gold producer appears well positioned to capture more upside should the bullion price remain steady.

Another major milestone for the quarter was the start of underground development at the Union Hill mine. The new development will provide access for underground diamond drilling to test the northern extensions of existing workings at Maldon’s Eaglehawk, Linscott’s, Ladies and Sailors Reefs targets.

The underground push adds another dimension to a busy surface exploration campaign aimed at building a pipeline of fresh drill targets. Recent infill soil sampling has outlined strong, continuous gold and arsenic anomalies across multiple structures, with some promising trends extending over 1.5 kilometres of strike. This work has been bolstered by a helicopter-borne magnetic and radiometric survey, providing a clearer picture of the structural architecture, with a surface diamond drilling campaign also ongoing.

With the Henty operation humming along and paying the bills, Kaiser appears to be in an enviable position of being largely debt-free and sitting on a sizeable cash pile as it methodically advances exploration across one of Victoria’s most celebrated high-grade goldfields. With no hedging in place and a production target of 32,000 ounces for FY27, the company looks to be fully exposed to any upside in the gold price. As drill rods turn on both surface and underground hotspots at Maldon, punters will likely be watching closely for the results to start flowing.

Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au