Auag,Hadleigh Castle is a Charters Towers style narrow vein...

Auag,
Hadleigh Castle is a Charters Towers style narrow vein underground gold mine dated at the same age as the main Charters Towers veins (410 m.y). It started full production in mid 1998 operated by SMC Gold Ltd with a plant operating at Rishton in Broughton Rd, Charters Towers. Supplementary feed came from the Far Fanning mine as well. The project is also known as Rishton (includes Hadleigh Castle and Joe’s Delight). Operations produced 19,488 oz in 2000 (5.86 g/t head grade), 19,622 oz in 2001 (3.26 g/t), 23,581 oz in 2002 (4.48 g/t), 14,820 oz in 2003 (3.98 g/t), 24,525 oz in 2004 (3.55 g/t) and 16,964 (4.11 g/t) for the 9 months of 2005. Operations ceased in early 2005 and the Rishton plant was sold to BMA. SMC ran at a loss of $2.9M in 2004 ($0.15M profit in 2003, loss of $2M in 2002), a loss of $8.3M in 2005 and was at a loss of $3.1M at Dec 2005 (data from Register of Australian ).

Hadleigh Castle always struggled, because it was a marginal operation despite being run by Rob Kidd, who is probably Australia’s master operator for running a low-cost operation. The basic economics of gold mining are that 4 g/t is breakeven for an underground operation, and 25,000 oz/year is the lowest viable rate for a profitable operation to cover amortisation, depreciation and get a return on capital. As you can see from the above, Hadleigh Castle was always marginal. I never invested in SMC for that reason.