Red 5 reflects on ‘transformational’ year

Red 5 corporate development manager Len Eldridge has shed light on the gold company’s last 12 months at the 2024 Diggers & Dealers Mining Forum, describing the period as “transformational”.

Held annually in Kalgoorlie, Western Australia, the Diggers and Dealers Mining Forum aims to secure highly respected and relevant experts in the resources sector who are well-positioned to provide insightful commentary about the industry’s outlook.

Taking place from August 5–7, the forum is an opportunity for professionals to network, visit regional mining sites, engage with the media, invest in key projects, and engage with the resources sector at an executive level.

Speaking on August 6, Eldridge commenced his presentation by describing Red 5 as “a genuinely diversified intermediate gold producer of relevant scale”.

“Today, we boast a portfolio at various stages of the invest in yield cycle anchored by a strategic, long-life asset (in the Leonora district in WA),” Eldridge said.

“The portfolio produced over 440,000 ounces over the past 12 months, and 87 per cent of our four million ounces in reserves and 12 million ounces of resources are within producing operations today.”

Eldridge described this as a “competitive advantage” as Red 5 doesn’t “have the cost, complexity and timeline of greenfield development” that is “required to reach relevant scale” in some cases.

“This allows a business to capitalise on the strong prevailing gold price and a supportive environment, which is driving a constructive outlook for gold,” Eldridge said.

“The extensive established infrastructure at all our sites provides a pipeline of low capital intensity opportunities for margin expansion through project optimisation, life and mine extensions and growth.”

In June 2024, the merger between Red 5 and Silver Lake Resources was officially implemented. The deal saw Red 5 seize ownership of four gold projects: King of the Hills (KOTH), Deflector and Mount Monger in WA, and Sugar Zone in Ontario, Canada.

“Deflector has been a tremendous success since (the) acquisition and demonstrates the value of bringing an asset into a portfolio with a strong balance sheet and removing the constraints of a project finance facility,” Eldridge said. “At its simplest, it will allow an operation to crawl, walk and run.

“Mount Munga was Silver Lake’s foundation asset and continues to provide significant exposure to the gold price as we leverage the extensive mining services and process infrastructure to convert (and) commercialise the large 3.5-million-ounce resource base.”

Prior to its merger with Silver Lake, Red 5’s flagship project was KOTH, located in the Leonora district of WA.

Eldridge said KOTH has come through the development phase and Red 5’s current focus is to stabilise and optimise the project’s foundation for growth.

“The (Silver Lake) merger was underpinned by the strategy to combine the strengths of two companies, to leverage the compelling commercial logic to create a stronger, better company with a platform for further growth,” Eldridge said. “It was not about trying to fix a problem or combine more of the same.

“The portfolio, as it stands today, was created through a mix of discovery mine building, operational performance and M&A (mergers and acquisitions) through a range of gold prices.

“As is evident by the growth in Deflector and the transition from a Darlot (satellite gold mine) based operation to the construction of a new KOTH processing facility and large open pit.

“Once assets are within a diversified portfolio and a portfolio, it is really when the work starts and the journey of value creation can commence.”

Red 5 will use the 2024–25 financial year to ramp up open-pit mining at Mount Monger and optimise KOTH’s processing and open pit mining parameters, all while continuing the portfolio integration.

“In terms of growth, we will define advance and sequence growth opportunities within our portfolio across the short to long term,” Eldridge said. “Turning to Leonora, while KOTH is a different ore body, operation and scale to Deflector the ‘crawl, walk (and) run’ approach will be similar.

“We will ensure the operating discipline, systems and foundations are appropriate and sustainable to support the growth we see in this strategic asset with a modern mill, which is the largest, lowest cost and most scalable in the district.”

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