PERTH (miningweekly.com) – Gold miner Red 5 has completed the divestment of its Siana gold project, in the Philippines, for $19-million in cash.
The company in July this year struck an agreement with TVI Resource Development (TVIRD) to divest its interests in Philippine company Greenstone Resources Corporation, which holds both the Siana gold project and the Mapawa gold project in the Philippines
TVIRD is the Philippine affiliate of the TSX-V-listed TVI Pacific Inc, and has two operating mines and a number of other development projects in the Philippines with interests in gold, nickel and copper.
Red 5 said on Tuesday that the divestment of its interest in the Siana and Mapawa projects was consistent with the company’s strategy to focus on its King of the Hills and Darlot gold mines, in Western Australia, with the aim of becoming a midtier Australian gold producer.
Red 5 entered into the agreement with TVIRD after considering various options for the Siana project following the suspension of mining operations there in 2017.
TVIRD has advised that funding to restart Siana is expected to be sourced from existing operating cash-flows and debt facilities if required, and is targeting a restart of operations in the first half of 2023.
“Red 5 would like to thank TVIRD for a smooth transition during the divestment process, which has included securing all Philippines regulatory approvals. We look forward to maintaining a long-term relationship with TVIRD and wish them well with their plans to restart the Siana gold project for the benefit of all key stakeholders in the region,” said Red 5 MD Mark Williams.
“From a Red 5 perspective, the transaction streamlines our portfolio and removes the annual holding cost of approximately A$6-million. The divestment crystallises a combination of cash value for our shareholders while maintaining future exposure to the upside at Siana via a capped net smelter return royalty of 3.25%.
“We are now well established on our growth trajectory to becoming a midtier Australian gold producer with the construction of the King of the Hills gold mine now in full swing and first gold production on track for the June quarter 2022, complementing our nearby existing production base at Darlot.”