The open pit at Red 5’s Siana Gold Project in northern Mindanao.
The open pit at Red 5’s Siana Gold Project in northern Mindanao.

RED 5 Limited has commenced remediation activities requested by the Philippines Department of Environment and Natural Resources (DENR) in order to recommence mining operations at its Siana Gold Project. The company believes that this work will take 6-8 months to complete prior to commercial milling activities commencing.

In April the company was informed by the DENR that the cease and desist order imposed when the DENR advised Red 5 that the Siana tailings dam had been compromised would be lifted after the following three items were completed:

  • Complete construction of a new high density polyethylene (HDPE) lined tailings storage facility downstream of the tailings storage facility 4 (TSF4) for additional storage capacity and strength;
  • Install the proposed thickener and cement addition facility to allow for production of a dry tailings product with greater residual strength; and
  • Make the necessary modifications to the existing TSF4 and TSF3 to accommodate the new thickened cement tailings.

The DENR has advised Red 5 that they will coordinate with the Environmental Management Bureau in order for the necessary permit amendments to be processed.

During the March quarter work undertaken at Siana was limited to care and maintenance activities including in-pit pumping to maintain water levels.

Red 5 says that the Outotec thickener and all necessary long-lead items have arrived on site to complete the measures required to allow the lifting of the order. It has commenced activities required to implement the required measures and has engaged GR Engineering to assist with installation of the thickener and cement addition facility. It has also engaged Knight Piesold to assist with construction of the HDPE lined storage facility and the modification of TSF3 and TSF4.

Representatives from both companies visited the Siana site during April to meet site management and progress planning for the commencement of activities in May. Review of project risks, manpower requirements, community matters and hydrology is also being progressed to enable the company to prepare for the construction activities and prepare the operation for resumption of production.

Red 5 anticipates that subject to the formal lifting of the order, gold production will resume in the first quarter of 2015.

The company also recently announced that Steve Norregaard has stepped down as managing director with the role filled by Mark Williams, a previous non-executive director. Mark Williams is a mining engineer who has spent a number of years living and working in the Philippines. Steve Norregaard has been engaged by Red 5 as a consultant.

The company also appointed Ian Macpherson as a non-executive director. He is a chartered accountant with more than 30 years’ experience in financial and corporate advisory services specializing in the mining and resources industries.

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