The timing of any restart at the shuttered Union Hill mine is a...

The timing of any restart at the shuttered Union Hill mine is a big sleeper for the medium term fortunes of KAU.

When the maiden MRE for Union Hill was issued three years ago in July 2022, the inferred 187k ounces of gold was estimated from an ore grade of 4.4gpt.

Investors, er sorry, punters were underwhelmed.

Spot gold was in a trend decline at the time. after poking above $2,000 in the first half of 2022 it slid to $1,622 in the second half, which as it turned is the most recent low.

no wonder punters were downcast..

of course now, with spot gold quoted early Tuesday morning Sydney time around $3,400, that 4.4 gpt is a whole other story.

it was hoped three years ago that KAU would do some more drilling to lift the Union Hill MRE to a JORC indicated resource category but nothing happened.

the Union Hill restart was talked of, dreamt about probably but wishing and hoping doesn't pay a brownfields exploration rig and crew.

KAU hasn't been exactly awash with cash for a few years. Until now, that is with the Henty mine reportedly humming.

the free cash this operation generates should be enough to get things moving at Union Hill, along with brownfields exploration at A1 and Henty, and whatever further development capex is needed at A1 and Maldon.

a well targeted drilling program at Union Hill in the next few months could help provide the certainty needed for a mine restart at a guess in fiscal 25-26.

this would mean a 3-mine operation for KAU, a major derisking, and annual gold production well on the way to 100k oz.