Photo by: Bloomberg
PERTH (miningweekly.com) – ASX-listed Red 5 has joined the ranks of Australian gold producers after completing the purchase of the King of the Hills and Darlot gold mines, in Western Australia.
The company in August unveiled plans to acquire the Darlot gold mine from South Africa’s Gold Fields for a total consideration of A$18-million and the acquisition of the King of the Hills project, from Australian miner Saracen Mineral Holdings for A$16-million.
Red 5 told shareholders on Monday that as a result of the acquisitions, the company has a production and cash-flow base at Darlot, which forms the cornerstone of the Eastern Goldfields consolidation strategy, and a significant growth pipeline in the region, starting with King of the Hills, where underground mining is targeted to start next month.
“The completion of these transactions marks a significant milestone for Red 5, providing the company with immediate gold production and cash flow in one of Australia’s most exciting gold provinces, plus an outstanding growth pipeline which starts with an immediate satellite mining opportunity at King of the Hills, but also includes numerous near-mine and regional resource development and exploration opportunities,” said Red 5 MD Mark Williams.
The Darlot mine will continue mining and processing operations through the ownership transition, with all existing staff and contractors to be retained.
Red 5’s immediate operating strategies for the mining operation included targeting opportunities to increase the recovery of existing resources to extend the mine life, combine an extended Darlot operation with ore from King of the Hills to return the processing plant to full capacity, and to target other growth and consolidation opportunities in the region for existing undeveloped resources within economic trucking distance of Darlot.
The operating Darlot mine has produced some 2.7-million ounces of gold over a 28-year operating period, and produced some 66 000 oz of gold in 2016. The project includes a fully operational 0.83-million-tonne-a-year gold processing plant, which was refurbished between 2010 and 2013 for a total cost of A$17-million.
An underground mining contractor for King of the Hills will be appointed in October, and first ore from the operation to the Darlot mill is targeted for November.