The agreement with Ardea Resources allows Red 5 to earn up to an 80% interest in the Mt Zephyr and Darlot East gold projects
Red 5, through its fully owned subsidiary Darlot, has executed a farm-in joint venture agreement with Ardea Exploration for the Mt Zephyr and Darlot East Gold Projects in Western Australia.
The two projects are located in close proximity to the Darlot gold mine, which is operated by Darlot.
Under the terms of farm-in agreement, Red 5 is enabled to earn up to an 80% interest in the two prospective gold exploration projects, located in the Eastern Goldfields region of Western Australia.
Darlot is required to spend A$1.5m ($1.09m) within a 2-year period to earn an initial 60% interest in the tenements, after which Darlot may elect to spend an additional $800,000 to earn an additional 20% interest, for a total 80% earned interest in the tenements.
Red 5 managing director Mark Williams said: “Following the recent delivery of the Final Feasibility Study for the development of a bulk mining and processing operation at King of the Hills (KOTH), Red 5’s growth vision is based on the establishment of two separate production hubs at KOTH and Darlot.
“This Joint Venture Farm-in Agreement with Ardea Resources provides an exciting opportunity for the discovery of gold resources within economic haulage distance of the Darlot processing plant, which is currently operating at 1Mtpa throughput.”
The farm-in deal to support Red 5’s expansion strategy
Red 5 said that the farm-in agreement will supports its multi-strand strategy to expand the Darlot mineral resource base.
The expansion plans include regional ‘bolt-on’ acquisitions, along with comprehensive exploration works as part of the Darlot Mining Hub Strategy.
Mt Zephyr project is located within 100km trucking distance from the Darlot Mill, spanning over an area of 900km2.
The project is said to host various areas of known mineralisation, including the Dunn’s Find Prospect and the Gale Prospect, with early-stage similarities to Red 5’s 4.1Moz King of the Hills (KOTH) gold deposit.
The Darlot East Project has two exploration licences in an under-explored area, located 8km to the east of the Darlot Mine.
Williams added: “Ardea’s grassroots exploration programs have delineated a series of highly-prospective targets, including the high- priority Gale Prospect which shows interesting early-stage analogies to our 4.1Moz KOTH deposit.
“Red 5 now has a combined granted tenement footprint of 1,919 km2 in Western Australia’s Eastern Goldfields (including 423km2 under application), giving us a commanding position in this world-class gold district and an exceptionally strong growth pipeline of exploration projects.
“We are looking forward to getting on the ground to commence drilling and exploration programs at both the Mt Zephyr and East Darlot projects.”