Silver Lake Resources has announced it has acquired a significant portion of gold miner Red 5’s shares.
The acquisition totalled around 383 million shares, equating to around 11 per cent of Red 5’s issued capital.
Silver Lake has described the acquisition as a strategic investment, as Red 5 owns the King of the Hills (KOTH) gold mine operation and has an established broader footprint in the Leonora district in WA.
First gold at the KOTH site was produced in June last year and has since ramped up to full production.
The mine consists of a 4.75 million ounce mineral resource and 2.7 million ounce ore reserve, making it one of the top 10 largest mines in Australia by ore reserve.
Silver Lake has credited its cash balance and forecast free cash flow with providing the company the ability to move quickly on the opportunity.
The company has said it will continue to make investment decisions and deploy capital into organic and external opportunities, consistent with its stated strategy to become a larger, lower cost and longer life business.
Silver Lake’s portfolio of assets is concentrated in WA, including the Mount Monger gold mine near Kalgoorlie and Deflector copper-gold operations in the southern Murchison region.
The WA operations are supplemented by the growth potential of the Sugar Zone mine and the extensive prospective and underexplored associated land package in Northern Ontario, Canada.
Red 5 has seen significant leadership shakeups recently with the appointment of new chief financial officer David Coyne, as well as a number of departures to its board last week as part of its renewal process.
