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March 18, 2021

Red 5 receives full funding for King of the Hills gold project

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

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.

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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.

“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.

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What’s missing from your IPO industry assessment?

IPO activity all but stopped in 2020, as the investment community grew wary of the effects of COVID-19 on economies. No matter how deserving a business was of flotation, momentum was halted by concerns of when a ‘new normal’ of working patterns and trade would set in. Recently, sentiment has changed. Flotations picked up again during the second half of 2021, and now in 2022 the mood is decidedly optimistic. Business leaders have their eyes on fast rebounding economies, buoyant market indices and the opportunity once again to take their businesses public. As a result, global IPOs are expected to hit back this year. With GlobalData’s new whitepaper, ‘IPOs in Consumer and Retail: 5 must-include elements for your prospectus industry report’, you can explore exactly what is needed in the essential literature. GlobalData’s focus lies in the critical areas to get right:
  • Macroeconomic and demographic environment
  • Consumer context
  • Industry environment
  • Competitive environment
  • Route to market
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by GlobalData
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