THE BOURSE WHISPERER: Red 5 Limited (ASX: RED), through its wholly-owned subsidiary, Darlot Mining Company Pty Ltd, has exercised an Option Agreement to acquire a 100 per cent-interest in Mining Lease M37/54.
The Mining Lease includes the Great Western gold deposit.
Red 5 has executed a Sale and Purchase Agreement (SPA) with the tenement holder, Terrain Minerals (ASX: TMX).
The company believes the acquisition supports its stated multi-strand strategy to expand the Darlot Mineral Resource base, which includes regional ‘bolt-on’ acquisitions in addition to aggressive exploration being undertaken as part of its Darlot Mining Hub Strategy.
The Great Western gold deposit is located 80 kilometres trucking distance south of Red 5’s Darlot processing plant, which is currently operating at one million tonnes per annum.
Red 5 considers the acquisition of the Great Western gold deposit and surrounding Mining Lease represented a high-quality strategic addition to its Mineral Resource base within trucking distance of the Darlot mill.
Terrain Minerals had previously completed a JORC 2012-compliant Mineral Resource estimate for the Great Western deposit totalling 709,000 tonnes at an average grade of 2.7 grasm per tonne gold for 62,000 ounces of contained gold.
“Having completed the due diligence drilling, we believe the Great Western deposit represents a highly prospective addition to our Darlot Mining Hub Strategy, with an existing 62,000 ounce Mineral Resource and exploration upside, particularly at depth,” Red 5 managing director Mark Williams said in the company’s announcement to the Australian Securities Exchange.
“With an acquisition cost of $40 per Resource ounce, it boosts our Mineral Resource base within economic trucking distance of the Darlot mill.
“We will continue to seek further such opportunities – both through our exploration programs as well as through strategic acquisitions – with the aim of establishing five to ten years of Ore Reserves either at or within trucking distance of the Darlot mill as part of the company’s Darlot Mining Hub Strategy.”