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WA Gold Strategy

In August 2017, Red 5 announced plans to embark on a major new growth strategy in the Eastern Goldfields region of Western Australia after entering into binding agreements to acquire the operating Darlot Gold Mine from South African-based gold producer Gold Fields Limited (JSE, NYSE: GFI) and the advanced King of the Hills Gold Project from West Australian mid-tier gold producer Saracen Mineral Holdings (ASX: SAR).

The acquisitions will provide Red 5 with an extensive strategic footprint in the world-class Leonora-Leinster mineral district of WA, with the ability to leverage this position by pursuing a regional consolidation strategy aimed at establishing the Darlot mill as a central processing hub.

Once completed, the transactions will see both Gold Fields and Saracen join the Red 5 share register as major shareholders, representing a strong endorsement of its growth strategy and management team.

Further details regarding the Eastern Goldfields Consolidation Strategy is available from the Company’s ASX Announcement and investor presentation.

Darlot Gold Project

  • Operating gold mine located ~900km NE of Perth
  • Rich goldfield with production of 2.7Moz over a 28 year operating history
  • Historical production averaging 94koz/yr since 1989
  • Fully operational 0.83Mtpa gold processing plant (refurbished in 2010-2013), excess mill capacity
  • SAMREC Mineral Resource: 1.2Mt @ 6.0g/t Au for 224,000oz, as at 31 December 2016
  • Mining camp, including 402 rooms, mess and other camp associated facilities
  • Total land-holding of approximately 13,900ha
  • Extensive on-site infrastructure – ROM pad, paste plants, tailings dams, maintenance workshops, exploration/core logging and storage facilities, CASA certified airstrip
  • All required utilities including power and water
  • A total land-holding of 13,900ha with multiple exploration targets and a vast drilling database, providing excellent vectors for follow-up exploration.

King of the Hills Gold Project

  • Historical gold project located ~80km south of Darlot and ~28km north of Leonora – previously known as Tarmoola
  • Historical production by Mt Edon Gold Mines (and others) of 1.6Moz from the open pit (28.4Mt @ 1.7g/t – closed in 2004) and 0.3Moz by St Barbara from the underground (closed April 2015)
  • Underground Indicated and Inferred JORC Mineral Resource of 2.71Mt at 4.6g/t Au for 402,000oz of contained gold
  • Includes established site infrastructure immediately adjacent to Goldfields Highway and near mining centre of Leonora
  • Tenement holding of 11,751 Ha with excellent exploration potential within the under-explored leases (Historical focus was targeted on near surface oxide resources and near mine opportunities)

The Opportunity

  • Darlot mill has operating capacity of:
    830,000tpa – sulphide ore
    Can be upgraded to 1,100,000tpa capacity for a relatively small spend
    Currently under-utilised
    ~94% recoveries
  • Opportunity to reduce cost per tonne at Darlot by:
    Mining ore adjacent to previously mined areas and close to existing underground development
    “Right-sizing” the mining equipment
    Increasing the processing plant throughput
  • Stage 1 Mine Plan: to maximise mill throughput over 3 - 4 year period by processing ore from both Darlot and King of the Hills
  • Stage 2 Mine Plan: to increase Reserves by undertaking regional exploration and opportunities for acquisition of neighbouring prospects