THE BOURSE WHISPERER: Red 5 Limited (ASX: RED), by way of the company’s wholly-owned subsidiary, Darlot Mining Company, has entered into an Option Agreement for the right to purchase a 100 per cent interest in Mining Lease M37/54, containing the Great Western gold deposit in Western Australia.
Red 5’s subsidiary struck the deal with Terrain Minerals (ASX: TMX) at a consideration for the issue of $2.2 million worth of ordinary fully paid shares in Red 5.
An option fee payable to Terrain Minerals of $300,000 is payable in immediately available funds within five business days.
Red 5 said the proposed acquisition provided a low-risk opportunity for the company to increase its Mineral Resource base within economic trucking distance of the Darlot gold processing plant.
“This represents a strong opportunity for Red 5,” Red 5 managing director Mark Williams said in the company’s announcement to the Australian Securities Exchange.
“Mining Lease M37/54 has an existing Mineral Resource, and is located in close proximity to our existing Darlot operations.
“This option agreement with Terrain Minerals provides the opportunity to complete additional drilling and confirm this potential with minimal upfront cash outlay.
“Darlot is one of the great gold mines of the Eastern Goldfields, operating continuously for over 30 years and producing approximately 2.9 million ounces of gold to date.
“It is a core asset for Red 5 and we have a multi-pronged plan underway to deliver continued growth in Resources and mine life.”