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Red 5 Confirms KOTH Bulk Mining Opportunity

THE DRILL SERGEANT: Red 5 Limited (ASX: RED) released a maiden 1.45 million ounce open pit Ore Reserve for the company’s 100 per cent-owned King of the Hills (KOTH) gold mine in Western Australia supported by a Pre-Feasibility Study on a stand-alone bulk open pit mining and processing operation.

The maiden open pit Probable Ore Reserve for the KOTH gold project has come in at 36 million tonnes at 1.25 grams per tonne gold for 1.45 million ounces of contained gold.

A maiden open pit Probable Ore Reserve for the satellite Rainbow deposit was also calculated at 1.4 million tonnes at 1g/t gold for 44,000 ounces of contained gold.

Red 5 is currently undertaking a supporting Pre-Feasibility Study (PFS), which it said is an important part of the long-term bulk mining strategy for KOTH, holding key components of:

A bulk open pit mining operation, underpinned by a maiden 1.45Moz Probable Ore Reserve;

Construction of a new 4Mtpa CIL processing plant on site, which will provide processing capacity for the integrated KOTH bulk mining strategy, consisting of the KOTH open pit, satellite starter pits, as well as maintaining or expanding output from the existing bulk underground mine;

Average annual gold production of 140,000 ounces over a mine life of 10 years. The company believes the current higher-grade underground mining operation is likely to be able to be reconfigured to add additional annual production ounces, to be assessed as part of studies for the Final Feasibility Study (FFS);

Forecast capital cost of $218 million, which includes pre-strip costs of $24 million and owners’ costs;

Estimated average all-in sustaining cost (AISC) of $1,167 per ounce over the life-of-mine (LOM); and

Technically low-risk project development, with extensive mining history providing well-established metallurgy and recovery metrics.

The Red 5 Board has given approval to proceed with a FFS on the integrated bulk open pit opportunity and underground mining operations at KOTH.

The FFS is scheduled for completion by mid-CY 2020, with an estimated cost of $4 million.

Additional elements to be included in the FFS include Indicated and Inferred Mineral Resource of 17.5 million tonnes at 2g/t gold for 1.11 million ounces of contained gold (1.0g/t Au cut-off) outside of the current KOTH optimised pit shell, which will be the basis of the underground mine.

Underground exploration upside exists with a large proportion of the prospective Eastern Margin Contact remaining largely untested by drilling.

Regional satellite deposits, including Severn, Centauri and Cerebus-Eclipse, also offer the opportunity for early gold production and cash-flow.

Regional exploration targets include Cavalier, Puzzles and other prospects along the Ursus and Tarmoola Fault Zones.

These and other targets are being systematically explored.

“The delivery of this maiden JORC 2012 open pit Ore Reserve and the supporting PFS is a significant milestone for our shareholders,” Red 5 managing director Mark Williams said in the company’s announcement to the AUSTRALIAN Securities Exchange.

“It marks a key step towards realising our objective of transforming Red 5 into a substantial mid-tier gold producer with a diversified production base and production profile.

“To put the PFS numbers into perspective, King of the Hills now has a bulk Mineral Resource for the Eastern Margin contact zone of 3.11 million ounces, inclusive of a maiden open pit Ore Reserve of 1.45 million ounces, and has the potential to become Western Australia’s next significant gold mine.

“This open pit PFS is a key stepping-stone, setting a firm foundation for us to unlock the broader value at King of the Hills by developing an integrated open pit and underground bulk mining operation.

“The PFS confirms a technically robust, long-life project based on the open pit mine development, underpinned by maiden Ore Reserves of 1.45 million ounces, with annual average gold production of 140,000 ounces per annum at an average all-in sustaining cost of $1,167 per ounce.

“The initial capital cost of $218 million includes the construction of a 4 million tonnes per annum CIL processing plant on site, which provides sufficient processing capacity for an integrated bulk open pit and underground mining operation and is the significant component of the expected total upfront cost.

“We will now use this PFS as the basis for a Final Feasibility Study (FFS) that will also incorporate concurrent bulk underground mining as well as satellite starter pits to provide a more complete picture of the project.

“The FFS will also include the bulk underground Resource, which currently stands at 1.1 million ounces, the regional oxide resources, as well any additions to the Resource base as a result of ongoing underground and regional exploration programs.

“We are confident the project will continue to enjoy growth in both Resources and Reserves over the next 12 months and we are focused on advancing the KOTH project towards development over the next 18 months.

“In parallel with the continued successful operation and growth of our Darlot operations, King of the Hills has the potential to quickly elevate Red 5 in the ranks of Australia’s mid-tier gold producers.”

 

Email: info@red5limited.com

Website: www.red5limited.com

 

Red 5 Limited Increases King of the Hills Resource

THE DRILL SERGEANT: Red 5 Limited (ASX: RED) reported an updated bulk mining Mineral Resource estimate for the company’s King of the Hills (KOTH) gold project, located in the Eastern Goldfields region of Western Australia.

The updated estimate comprises 66 million tonnes at 1.5 grams per tonne gold for an estimated 3.11 million ounces of contained gold.

The updated Resource represents a 65 per cent increase in contained gold over the previous Mineral Resource estimate announced in December 2018, with 76 per cent of the Resource, 53.1 million tonnes at 1.4g/t gold for 2.35 million ounces, now classified in the higher confidence Indicated Resource category.

The Resource includes open pit and underground components, comprising:

Open pit: Indicated and Inferred Resource of 48.5 million tonnes at 1.3g/t gold for 2 million ounces of contained gold (0.4g/t Au cut-off); and

Underground: Indicated and Inferred Resource of 17.5 million tonnes at 2g/t gold for 1.11 million ounces of contained gold (1.0g/t Au cut-off).

Red 5 said there was potential for further Resource growth, with a large proportion of the prospective Eastern Margin Contact remaining largely untested by drilling.

“This result furthers our goal of developing a large standalone bulk mining and processing operation at King of the Hills,” Red 5 managing director Mark Williams said in the company’s announcement to the Australian Securities Exchange.

“The upgraded Mineral Resource clearly demonstrates the scale and potential of this exceptional project, which we believe has the potential to form the cornerstone of a substantial mid-tier Australian gold business with the resource base, production profile and mine life required to attract global institutional investor interest.

“The updated Resource provides the foundation for a Pre-Feasibility Study to evaluate the economics of a potential stand-alone operation at KOTH which is now well underway.

“This PFS will focus initially on the open pit Resource, supplemented by the Resources currently being evaluated by our ongoing regional exploration program such as the recently announced Resources for the Rainbow and Severn satellite deposits.

“In addition to the results of the PFS, further news from the underground diamond drilling program – which is continuing to deliver exceptional results which have not been fully captured in this Resource upgrade – will be released in due course.

“The results being generated have demonstrated the potential for further significant growth in the Resource both down-plunge and along strike.”

 

Email: info@red5limited.com

Website: www.red5limited.com

 

Red 5 Releases KOTH regional Resources

THE DRILL SERGEANT: Red 5 Limited (ASX: RED) announced the completion of maiden JORC 2012-compliant Mineral Resource estimates for the Rainbow and Severn near-mine deposits at the company’s King of the Hills (KOTH) gold project in Western Australia.

Red 5 said the Resources had been calculated on drilling completed by past owners and highlight the potential to define near-mine open pit resources that will support the broader bulk mining strategic review currently underway at KOTH.

The Resources came in as:

Rainbow: Indicated and Inferred Resource of 1.6 million tonnes at 1.3 grams per tonne gold for 67,000 ounces; and

Severn: Indicated and Inferred Resource of 0.9 million tonnes at 1.6g/t gold for 47,900 ounces.

The company said the Resources provide a solid foundation for its strategy of defining open pit ore sources to provide early mill feed to support a potential development of a stand-alone processing facility at KOTH.

The Rainbow resource is approximately 83 per cent oxide and transition, and Severn is around 69 per cent oxide and transition.

“This is a big free-kick for us and the ongoing KOTH bulk mining strategic review,” Red 5 managing director Mark Williams said in the company’s announcement to the Australian Securities Exchange.

“The Rainbow and Severn deposits establish a baseline of open pit Resources within a six-kilometre radius of a potential stand-alone processing plant at King of the Hills which can be developed to provide early mill feed.

“Early cash-flow is important and our objective with this campaign is to delineate sources of oxide and transitional open pit mineralisation that can supplement production from the existing KOTH underground mining operation to feed a potential stand-alone processing plant, should further studies prove positive, during a pre-strip requirement of the KOTH open pit.

“We believe there is excellent potential to continue to grow the near-mine open pit Resource base, with our ongoing regional drilling program designed to progressively test five priority near-mine targets, each of which has the potential to yield further Resources.

“The early success of our regional exploration campaign at KOTH once again demonstrates just how under-explored our broader tenement package is.

“We are confident that we can add to our already significant Resource base with sustained, focused and systematic exploration.

“This is an exciting opportunity for the Company alongside the bulk mining story at KOTH which will unquestionably remain the centrepiece of our growth story over the next few months.”

 

Email: info@red5limited.com

Website: www.red5limited.com

 

Red 5 Identifies New Regional Targets at KOTH

THE DRILL SERGEANT: Red 5 (ASX: RED) is full steam ahead at the company’s King of the Hills (KOTH) gold mine in Western Australia.

Red 5 has a regional Reverse Circulation (RC) drilling program underway as well as a review of existing exploration datasets that has delivered a series of new high-priority targets.

The company said the RC program is designed to test five Tier-1 near-mine regional targets – Cerebus, Eclipse, Centauri, Cavalier and Puzzles.

The drilling program is targeting opportunities for near-term gold production, with the aim of generating early mill feed for a potential stand-alone gold processing facility at KOTH.

A recently-completed geophysicsreview by Southern Geoscience Consultants (SGC) identified new high-priority targets along the Ursus and Tarmoola Fault Zones’ structural corridors.

These datasets were composited to form a detailed litho-structural interpretation acrossthe KOTH tenure, resulting in multiple new exploration targets, of which 22 have been ranked as high-priority.

Further assessment of each target is now underway to prioritise for drill planning.

“The results from the processing of both the geophysical data by Southern Geoscience and the review of the historical exploration data confirms that just about the entire length of both the Tarmoola and Ursus Fault Zones is alive with discovery opportunities,” Red 5 managing director Mark Williams said in the company’s announcement to the Australian Securities Exchange.

“We now have drilling underway to test five initial targets, and we are building a strong pipeline of new opportunities that we will progressively and systematically test over the coming months.

“Mineralisation delineated to date within the KOTH area varies from shallow to steep dipping, with our data review indicating that a significant proportion of historical drilling may not have been deep enough to effectively test the ground for mineralisation.

“There are also large gaps between drill holes along the Ursus Fault Zone.

“The untapped potential within this region is very exciting.

“This near-mine regional exploration program at KOTH represents an important element of our bulk mining strategic review, with the real potential for these targets to deliver early mill feed for a potential future stand-alone processing plant on site, which we expect could enhance the economics of a future bulk mining operation.”

 

Email: admin@red5limited.com

Website: www.red5limited.com

 

Red 5 to Commence KOTH Drill Program

THE DRILL SERGEANT: Red 5 Limited (ASX: RED) is preparing exploration drilling to test five high-priority regional gold targets at the company’s King of the Hills (KOTH) project in Western Australia.

Red 5 identified and ranked the five target areas using high-quality datasets comprising historical drilling by previous owners, updated geological and structural interpretations, surface geochemistry and regional aeromagnetics.

The drilling program is designed to assess the potential for both high-grade gold mineralisation as well as mineralisation to support the potential for a bulk mining operation at KOTH.

Red 5 has recently announced an initial bulk mining Mineral Resource at KOTH comprising 28.7 million tonnes grading 2 grams per tonne gold for an estimated 1.88 million ounces of contained gold.

Red 5 indicated the regional drilling program will be conducted in parallel with an underground drill program underway at KOTH aimed at extend and in-filling the current 1.88 million ounce bulk mining Mineral Resource area, with results from both sets of drilling programs to feed into the bulk mining Strategic Review.

“We are very excited about the significant untapped exploration potential at KOTH over and above the exciting new bulk mining opportunity which we are currently pursuing,” Red 5 managing director Mark Williams said in the company’s announcement to the Australian Securities Exchange.

“The broader tenement package is very under-explored, and we believe that the outstanding suite of targets we have defined have potential to develop and grow the current Resource base.

“All of the proposed drill targets have already been defined by the presence of shallow, oxide gold mineralisation, each of which are open along strike and remain completely untested down-dip into fresh rock.

“We believe that the geological setting of each target demonstrates characteristics analogous to KOTH- and Gwalia-style gold mineralisation and present significant discovery opportunities.

“This major new regional exploration program constitutes a third significant branch of exploration activity within the KOTH project over the next few months, alongside continuing assay results from the ongoing 30,000 metre underground diamond drill program and the program of assaying previously un-assayed historical drill core.”

 

Email: info@red5limited.com

Website: www.red5limited.com