The Red 5 Limited (ASX: RED) share price is tumbling lower in morning trade, down 8% at the time of writing after earlier posting losses of more than 11%.
Below we take a look at the ASX gold miner's latest production guidance for its Darlot Gold Mine.
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What production guidance did Red 5 report?
Red 5's share price is moving lower after production guidance for its Darlot Gold Mine for the 2021 financial year (FY2021) was revised downward while costs were forecast to be higher.
The new production guidance comes in at 74,000–78,000 ounces, down from the previous estimate of 80,000–85,000 ounces. Meanwhile All In Sustaining Costs (AISC) nudged higher, to $2,240–2,290 per ounce, up from the previous $2,150–2,280 per ounce.
Red 5 reported that it was struggling to find enough labour at its Darlot underground mine and its Great Western open pit mine. The labour shortages continue to hamper production.
At the Great Western mine, it said a shortage of machine operators and truck drivers meant the contractor could not increase mining activities as fast as planned, following commencement of mining in the March quarter.
Commenting on the company's gold operations, Red 5's Managing Director, Mark Williams said:
Red 5 continues to make excellent progress on the King of the Hills Gold Project, however we continue to face challenges at our Darlot Gold Mine. The difficulty of sourcing skilled labour for both Darlot and for our new Great Western mine has impacted our ability to achieve our FY21 production guidance.
As previously announced, King of the Hills remains on schedule and budget and is expected to commence gold production in the June Quarter 2022.
The company said it is reviewing its Darlot gold mining operations and will provide production and cost guidance for the 2022 financial year in the September quarter this year.
Red 5 share price snapshot
It's been a difficult year for Red 5 shareholders, with shares in the ASX gold miner down 39% over the past 12 months. By comparison, the All Ordinaries Index (ASX: XAO) is up 29% in that same time.
Year-to-date the Red 5 share price is down 31%.
