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REGIONAL NEWS - AUSTRALIA/OCEANIA 20 E&MJ; • SEPTEMBER 2017 www.e-mj.com Red 5 Planning Western Australia Gold Production Hub Red 5 Ltd. has announced separate agree- ments to acquire the operating Darlot gold mine from Gold Fields Ltd. and the advanced King of the Hills gold project from West Australian gold producer Sar- acen Mineral Holdings. Both assets are located in West Australia's Eastern Gold- fields, about 900 kilometers (km) north- east of Perth, with King of the Hills locat- ed about 80 km south of Darlot. Red 5 considers the Darlot processing plant to be a key to unlocking numerous isolated gold deposits that lie within a 100-km radius. The first additional de- posit to be pursued under this strategy will be the King of the Hills project. Total consideration for the Darlot ac- quisition is A$18.5 million, comprising A$12 million in cash and 130 million Red 5 shares. The cash component is made up of A$7 million up front and A$5 million deferred for up to 24 months. The deferred consideration may be taken as additional shares in Red 5 or as cash at Gold Fields' election. Consideration for the King of the Hills acquisition is A$7 million cash up front, 90 million Red 5 shares, and A$4.5 mil- lion in cash or Red 5 shares at Saracen's election 12 months after completion of the transaction. Red 5 anticipates that both trans- actions will be completed by the end of September. Once completed, the trans- actions will see both Gold Fields and Saracen join the Red 5 share register as major shareholders. Darlot operations includes an 830,000-metric-tons-per-year (mt/y) car- bon-in-pulp and carbon-in-leach process- ing plant, with excess capacity, that was refurbished between 2010 and 2013 for a total cost of A$17 million; a 402-room mining camp; and a total land-holding of approximately 13,900 ha. Production in 2016 totaled 66,000 oz of gold. Miner- al resources as of year-end 2016 totaled 1.2 million mt at a grade of 6 g/mt of gold for 224,000 oz of contained gold. The King of the Hills project is located on a previously mined property and has a current underground indicated and in- ferred mineral resource of 2.71 million mt grading 4.6 g/mt of gold for 402,000 oz of contained gold; a new underground mine design developed by Saracen follow- ing a six-month trial underground mining campaign; established site infrastructure; and an 11,751-ha tenement holding with excellent exploration potential. Saracen has identified multiple lodes extending to more than 1.95 km and re- maining open at depth that provide nu- merous exploration drilling targets. Red 5's Stage 1 development plan for the two properties is to maximize through- put at the Darlot mill over an initial three- to four-year period by processing ore both from Darlot and from King of the Hills un- derground mining operations. Stage 2 will center on increasing the company's reserve base in the Eastern Goldfields through ex- ploration within the 25,700-ha tenement acquired under the two transactions. Heron Orders Plant Equipment for Woodlawn Heron Resources has placed orders for a number of equipment items that are on the critical path for development of its Wood- lawn zinc-copper-lead project 250 kilome- ters (km) southwest of Sydney, New South Wales. Orders for the equipment followed an analysis of the development schedule aimed at identifying the long-lead items on the critical path to first production. The items are integral to the processing facility and include an IsaMill M10000 fine grinding mill (value US$4.4 mil- lion), Outotec flotation cells (value A$4.9 million), and Outotec thickeners (value A$1.2 million.) The IsaMill M10000 product name indicates the volume of the grinding chamber, 10,000 liters. The orders are expected to have a positive impact on the project's overall schedule. The processing facility will be delivered in stages that align with mine development. The facility will have a rated throughput capacity of 1.5 million metric tons per year (mt/y) when treating re- claimed tailings and 1 million mt/y when treating underground ore. Plant feed will initially be tailings and will switch to un- derground ore when it becomes available. Three separate base metal concen- trates will be produced — zinc, copper and lead, with precious metal credits in the copper and lead concentrates. Pro- duction is planned at approximately 70,000 dry mt/y of zinc concentrates, 30,000 dry mt/y of copper concentrates, and 25,000 dry mt/y of lead concen- trates. Byproduct revenue will be generat- ed from the gold and silver content in the lead and copper concentrates. Initial capital to develop the Woodlawn project is estimated at A$151.6 million. The project is located on the site of the former Woodlawn mine, which operated from 1978 to 1998. The Darlot mine (above) is an underground operation that feeds 800,000 mt/y of ore to a processing plant that produces around 80,000 oz/y of gold.