Gold miner Red 5 has secured $135.5m (A$175m) in investment commitment to fully finance the development of King of the Hills (KOTH) project in Western Australia.

The King of the Hills gold mine is located 80km south of the Darlot Gold Mine and 28km north of the town of Leonora in the Eastern Goldfields region.

The Australian gold mining firm signed a commitment from a syndicate comprising three banks for a $123.8m (A$160m) senior secured project loan facility, as well as a $11.6m (A$15m) cost overrun and working capital facility.

Additionally, the mining firm launched a A$60m 4-for-21 fully underwritten non-renounceable entitlement offer, priced at $0.123 (A$0.16) per share.

Red 5 managing director Mark Williams said: “The commitment of Debt Facilities follow an exhaustive due diligence process by the banks’ Independent Technical Expert.

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“We will now work with the banks as quickly as possible to achieve financial close, putting us in a position to make our first draw-down in the June 2021 Quarter.

“With multiple work streams already well underway and our EPC contractor advancing to Phase 2 of the plant construction contract, KOTH is a busy work environment, as we have outlined in recent announcements.”

The company plans to use the funds raised from the entitlement offer for the development of KOTH project; drilling and development programmes at the Darlot Gold Mine; and general working capital.

With an estimated operational life of 16 years, the KOTH is slated to commence production in the June quarter 2022. It is expected to have average gold production of 176koz per annum for the first six years.