Silver Lake Resources has secured approval from its shareholders for its previously announced merger with rival Australia-based gold producer Red 5.

According to Silver Lake Resources, its shareholders cast 96.71% votes in favour of the proposed transaction at a shareholder meeting.

The deal now awaits a second court hearing, which is scheduled for 6 June 2024.

Silver Lake Resources aims to delist its shares from the Australian Securities Exchange (ASX) on 20 June 2024.

The two gold miners signed a binding scheme implementation deed (SID) in February 2024.

Under the terms of the SID, each shareholder of Silver Lake Resources will be issued 3.434 Red 5 shares for each of the shares held in the former.

Upon the completion of the deal, Red 5’s shareholders will hold 51.7% stake in the combined gold mining company while the remaining 48.3% will be owned by the shareholders of Silver Lake Resources.

At present, Silver Lake Resources owns approximately 411.7 million ordinary shares in Red 5, which is roughly 11.9% of the latter’s issued share capital. The market value of Silver Lake Resources’ shareholding in Red 5 is A$135.8m ($90.4m) as of 2 February 2024.

Following the closing of the deal, the merged entity is estimated to have a pro-forma market capitalisation of over A$2.2bn ($1.46bn). It will have four established mining hubs of scale in tier 1 gold jurisdictions of Western Australia and Ontario, Canada.

The enlarged gold company will have a combined production profile of about 445koz of gold per year for FY24. It will also have a significant ore reserve and mineral resource inventory of four million ounces and 12.4 million ounces, respectively.