Red 5 has capitalised on its appreciating value since the Silver Lake Resources merger, with more than 400 million shares sold at $0.335 per share.
Red 5 was trading at $0.26 per share when Silver Lake purchased the shares for $107.7 million in September and October 2023, albeit this was before the merger had been completed.
The shares have been sold for $136.8 million, with $29.1 million of additional proceeds generated between the two transactions.
Red 5 said Silver Lake’s investment was significant at the time.
“The investment in Red 5 by Silver Lake was significant in enabling the combination of complementary businesses, creating a diversified mid-tier gold miner with scale, longevity and sector leading financial strength,” Red 5 said.
The Red 5–Silver Lake merger was implemented in June and saw previous Silver Lake boss Luke Tonkin appointed to the same role at Red 5, with support coming from Red 5’s existing chief operating officer Richard Hay.
The merger 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,” Red 5 corporate development manager Len Eldridge said at Diggers and Dealers this week.
“Mount Monger 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.”
Eldridge said Red 5 continues to build its standing in the WA gold industry.
“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.”
Red 5 has $498 million in cash and gold and no debt following the block sale, with a market capitalisation of $2.31 billion.
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