Page 18 - gmj147-Apr-Jun-mag-web-neat

COVER

our homework on construction. We appointed Warren King million in cash and scrip.
as project manager, and he worked on the final stages of Until that moment, Red 5 had been something of an ASX
the feasibility study with the team. We were then able to oddity, an Australian gold miner whose sole producing asset
get ahead on the EPC contract and ordering key pieces of – Siana on Mindanao, Philippines – had seen operations
equipment. Because of that, we’ve been able to maintain suspended by government.
our target of first gold in the June quarter, despite all the
With the future in one of Asian mining’s most troubled
pressure on labour and supply chains.”
jurisdictions looking glum, Williams and the Red 5 board
Williams admits it took some time to convince shareholders instigated a new strategy to return to WA.
that an early capital raising was the way to go but once the
Fortunately for the company, the emerging producers
plan was laid out, the company saw strong backing.
Saracen and Gold Fields were going through portfolio
“After we explained the rationale, everyone was very restructures which left both King of the Hills and Darlot
supportive,” he says. “The capital raising was oversubscribed, surplus to requirements.
being well backed by both existing and new shareholders.”
The key to the move for the two WA gold mines was bringing
Red 5’s willingness to take audacious steps wouldn’t have them together, according to Williams.
come as a surprise to long-term investors who had already
“After the experience in the Philippines, the company wanted
witnessed the company execute a corporate play which
multiple assets,” he says. “In Darlot and King of the Hills,
transformed its outlook.
we saw an opportunity to combine two assets and realise
When the new gold room at King of the Hills delivers its synergies and economies-of-scale no one else previously
maiden gold bars, it won’t be a first for either company or had.”
asset but it stands to be momentous for both.
Although relatively close, the two mines had never been
The mine is now under its fourth owner without ever attaining under a single ownership structure. Red 5 used the
flagship status while Red 5 has already built the Siana gold complementary operations to steadily build its capabilities
mine in the Philippines and operated both King of the Hills in WA.
and its neighbour, Darlot, but this feels like a genuine turning
Darlot was heading into its 31st year of continuous operation
point for the company.
while King of the Hills was on care-and-maintenance
The rebirth started in 2017, when Red 5 stunned the market after Saracen had ended its operations there. Red 5’s
days ahead of Diggers & Dealers by announcing the immediate objectives were simple – keep Darlot running
acquisition of King of the Hills from Saracen Mineral Holdings and restart underground mining at King of the Hills to top
and nearby Darlot from Gold Fields Ltd for a combined $34.5 up the Darlot mill.

Those goals were achieved with the
combination of Darlot and King of the Hills
underground delivering around 100,000
ozpa for three years between 2018 and
2020.
However, that was just the start of Red 5’s
journey at King of the Hills.
“It took us a year of mining at King of the
Hills before we stepped back and asked
whether we could turn back the clock,”
Williams reflects, referring to the decision
to revisit the King of the Hills mine plan.
Since then-owner Sons of Gwalia fell into
administration in 2004, King of the Hills had
always been considered an underground
proposition. St Barbara Ltd and then
Saracen had enjoyed strong margins from
selective underground mining practices
but with Darlot providing cash flow, Red
5 had the opportunity to revisit Sons of
Gwalia’s open pit approach.
The reworked approach led Red 5 to drill
a series of horizontal and sub-horizontal

Page 18 Page 18
Page 18