Red 5-Silver Lake Resources to merge

In breaking news, Red 5 Ltd (ASX: RED) and Silver Lake Resources (ASX: SLR) will merge to create a 445,000ozpa mid-tier gold mining company, with ore reserves and mineral resource inventory of 4moz and 12.4moz respectively.

Once the merger is finalised, the company will have ownership of four gold projects: King of the Hills (KOTH), Deflector operations, Mount Monger operations, all three in WA, with the Sugar Zone project in Ontario, Canada.

Silver Lake managing director Luke Tonkin says “this transaction represents a highly complementary combination of assets and balance sheets for the mutual benefit of both Silver Lake and Red 5 shareholders”.

Red 5 managing director Mark Williams says the “logical merger of two leading mid-tier gold companies [represents] and exciting inflection point for Red 5 shareholders following the successful development, ramp-up and achieving steady state production at King of the Hills.”

The combined entity will be led by Russell Clark as Chairman, while the executive management team will consist of Silver Lake’s Luke Tonkin as Managing Director and Chief Executive Officer, Red 5’s Richard Hay as Chief Operating Officer and Silver Lake’s Struan Richards as Chief Financial Officer.

The proposed merger will be implemented by way of a scheme of arrangement in relation to Silver Lake. If implemented, Silver Lake shareholders will receive 3.434 new shares in Red 5 for every share of Silver Lake they own.

First court hearing is expected in mid-to-late April this year, with the implementation date a couple of months later in June.