Goldminer Red 5 has agreed to sell its assets in the Philippines for $US19 million, in a bid to further focus on developing its King of the Hills project in WA.
Goldminer Red 5 has agreed to sell its assets in the Philippines for $US19 million, in a bid to further focus on developing its King of the Hills project in Western Australia.
Today, Red 5 announced it would sell its Philippines business, Greenstone Resources Corporation – which has interests in the Siana mine and nearby Mapawa project – to Toronto-listed TVI Resource Development.
TVI already owns two mines and a number of projects in the country.
Its subsidiary, Prime Resource Holdings, will become the owner of the Red 5 assets, with a view to restart operations at Siana – located on the island of Mindanao – within the first half of 2023.
That’s expected to be financed using existing cash and potential debt funding.
Red 5, led by managing director Mark Williams, had placed the mine on care and maintenance in April 2017, due to uncertainty around mining policies and foreseen changes to open pit operations.
The company pivoted its operations to WA in October that year when it acquired the Darlot and King of the Hills goldmines from South Africa’s Gold Fields and Saracen Mineral Holdings, respectively, for a combined $34 million in cash and scrip.
The Darlot mine, located in the eastern Goldfields, produced 76,104oz in the year to June 30, in line with guidance.
That figure will rise once mining at the nearby 2.4-million-ounce King of the Hills project begins, around mid-2022.
King of the Hills will average 146,000oz per annum within the first six years of operations, according to a final feasibility study completed in September last year.
“We are now well established on our growth trajectory in the Australian gold sector with the construction of the King of the Hills mine now in full swing and first gold production on track for the June quarter 2022, complementing our existing production base at Darlot,” Mr Williams said.
The deal with TVI streamlined Red 5's portfolio, he said, as well as removed an annual holding cost of about $6 million.
Red 5 will receive $US19 million ($A26 million) in cash for the assets – which includes the Siana process plant and associated infrastructure – and a 3.25 per cent royalty payment for up to 619,000oz produced from the restart.
The companies are working to finalise the agreement.
PCF Capital Group is acting as financial adviser to Red 5 and HopgoodGanim Lawyers and Manila-based SyCipLaw Center as legal advisers.
Shares in the goldminer were up 2.7 per cent at 1:19pm AEST to trade at 19 cents.
