Drones-as-a-service provider Delta Drone International (ASX: DLT) has secured a contract with Australian gold producer Red 5 Ltd (ASX: RED) to provide drone powered aerial surveying services to two mines located in Western Australia. 

The three year contract will see Delta’s drones flying over several mines operated by Red 5’s subsidiary, Greenstone Resources Ltd (ASX: GSR) who operate the King of the Hills Mine (KOTH) and the Darlot Mine. Both mines operate 900 kilometres north-east of Perth in the Leonora-Leinster province, where they collectively produced 76,104 ounces of gold in the last financial year.

Delta will provide their drones-as-a-service through their mining focussed subsidiary Rocketmine Pty Ltd, where the contract is valued at $1.01m and will produce annual recurring revenue of $336k (billed monthly). 

“We are pleased to be officially working with Red 5 and to provide frequent aerial surveying support which can be delivered efficiently and effectively to the business across a number of areas including for open-pit mining, stockpile, processing area and for environmental purposes,” said Delta Drone CEO, Christopher Clark. 

The contract comes a few days after the miner completed its first successful gold pour at its KOTH mine on 6 June 2022, where it yielded a lovely 1,588 ounces and showed a promising future at the location. 

The significance of an initial gold pour is that it validates and reaffirms a site’s potential output for the future.

The initial gold pour marked a significant milestone for the Company, which first acquired the gold project from Saracen Mineral Holdings, which has since merged with Northern Star Resources (ASX: NST), in October 2017. In the next few weeks following the pour, the processing team at the KOTH mine will begin to increase the mill production rate and send the processing plant into full operation, where they hope to achieve turnover rates of 1,600 tonnes per hour at full capacity. 

“We can be all proud of this achievement. It marks the beginning of a new era for Red 5, with the new 4.7Mtpa King of the Hills processing plant set to become a highly efficient production hub,” commenting on the pour, Red 5 Managing Director, Mark Williams.

Delta Drones recently acquired a beyond visual line of site licence (BVLOS) on 9 May 2022. The licence, which is often challenging to obtain, gives the pilot the freedom to operate an aircraft out of their visual line of sight. The licence is a huge game-changer as it puts the Company in pole position to capture any new opportunities in the industry as only a few companies in Australia have been able to acquire one for commercial use. 

In the annual report to 31 May 2022, DLT recorded revenue at $4.6m, an increase of 36% on the previous-corresponding period (pcp) of $3.4m. The Company also recorded a 12% increase in new enterprise customers, where they signed on GoviEx Uranium Inc, BDO Global, and Lucapa Diamonds (ASX: LOM) to add to their already 18 strong customer base.