Red 5 has signed agreements worth around $34m for the acquisition of gold assets in the Eastern Goldfields vicinity of Western Australia, with the aim of improving its portfolio in the region.
The company has agreed to acquire the operating Darlot Gold Mine from a subsidiary of Gold Fields for $18.5m. The mine is located around 900km north-east (NE) of Perth in the Leonora-Leinster mineral province.
It also agreed to acquire the King of the Hills (KOTH) gold project located about 80km south of Darlot, from Saracen Mineral Holdings for a sum of $16m.
Red 5 managing director Mark Williams said: “We have entered into binding agreements to acquire two significant West Australian gold assets, which together establish the foundations for a long-term consolidation and growth strategy in one of Australia’s most prolific and active gold districts, the Leonora-Leinster region of WA.
“The cornerstone of this strategy is the proposed acquisition of the Darlot Gold Mine from Gold Fields, a transaction which allows the Red 5 Group to transition immediately back into gold production at a well-established gold mine in Australia, where we can leverage our operational experience and capabilities.
“Our immediate focus will be to optimise the existing mining operation and evaluate the opportunities that exist to extend the life well beyond the current defined ore reserves.”
The Darlot mine acquisition comprises a fully operational 0.83Mtpa processing facility, with a mineral resource of 1.2Mt at 6.0g/t Au for 224,000oz of contained gold.
It also has further exploration potential with a land-holding of 13,900ha, featuring numerous exploration targets and a significant drilling database.
The advanced KOTH gold project has underground indicated and inferred resources of 2.71Mt at 4.6g/t Au for 402,000oz of contained gold.
The acquisition comprises site infrastructure adjacent to the Goldfields Highway and the mining centre of Leonora, and includes underground and open-pit mining potential with a land-holding of 11,751ha.
Both acquisitions will provide Red 5 a combined land holding of 25,700ha in the Leonora-Leinster gold district.
The transactions are subject to shareholder and other regulatory approvals, and are expected to be completed in the third week of next month.
Image: Operations at a mine operated by Saracen Mineral Holdings. Photo: courtesy of Saracen Mineral Holdings Limited.