Darlot was acquired from a subsidiary of South Africa-based gold producer Gold Fields (JSE:GFI) after paying $6.5 million in cash and 130 million Red 5 shares.
The Darlot Gold Mine has been acquired by Red 5 as a going concern and mining and processing operations will continue through the ownership transition.
A further deferred consideration (in cash or shares) of $5 million is payable to Gold Fields within the next 24 months and $4.5 million to Saracen within the next 12 months.
The acquisition makes Gold Fields and Saracen two substantial shareholders in Red 5 with each party holding a relevant interest of 19.92% and 10.54% respectively.
Red 5 now has a production and cash-flow base at Darlot and a significant opportunity at the King of the Hills, where underground mining is targeted to commence next month.
The acquisition was completed after Red 5 raised circa $12.7 million via a rights issue.
Importantly, this opens a significant new chapter for the company as an Australian gold producer listed on the ASX.
The company’s shares closed circa 11% higher on Monday, at $0.049.