Red 5 Limited (ASX: RED) has received firm commitments for a A$60 million two-tranche placement comprising the issue of 375 million new fully-paid ordinary shares. The Placement was well supported by domestic and international institutional investors.
The Placement funds will primarily support the ramp-up of its King of the Hills (KOTH) gold mine in Western Australia, Australia’s newest major gold mine.
Red 5 poured first gold from KOTH on June 5, 2022 after completing the project development on time and within budget, and is now progressing the ramp-up with commercial production expected to be achieved in the December 2022 Quarter.
Specifically, funds raised from the Placement will be applied to:
• Expanding the KOTH Process Plant throughput to ~5.5Mtpa in FY24;
• Completing the KOTH Process Plant Expansion Feasibility Study targeting further incremental throughput growth;
• Exploration and Resource conversion drilling (UG and surface); and
• Working capital and costs of the Placement.
Petra Capital Pty Limited and Canaccord Genuity (Australia) Limited are acting as Joint Lead Managers and Joint Bookrunners to the Placement, with Ord Minnett Limited acting as Co-Manager to the Placement.
“We are delighted with the support received for the Placement and the company is also pleased to offer existing eligible shareholders on the record date the opportunity to subscribe under a share purchase plan at the same price as the Placement,” Managing Director, Mark Williams, said.
“KOTH was delivered within budget and first gold poured on schedule in June 2022. Commercial production and steady-state operations is expected to be achieved during the December Quarter.
“The proceeds of this capital raise will strengthen our balance sheet and provide additional working capital to support the completion of the ramp-up of the KOTH plant. The funds will also allow us to pursue additional growth initiatives, including ongoing drilling and a KOTH Process Plant Expansion Feasibility Study to determine the optimum long-term plant capacity.”
For further information please visit: https://www.red5limited.com/