Strategic indeed @edgescape ! I would say that Luke Tonkin at Silver Lake would love to frustrate Raleigh Finlayson at Genesis once again. We know that Raleigh wants to roll up all the smaller Leonora players, and that definitely includes Red 5, who were in talks with both Genesis and St Barbara before the original SBM-GMD-merger proposition came out, which of course was later scuttled by Raleigh when he knew he was then in a better position and could cut a much better deal for Genesis by buying just SBM's Leonora assets without all the unwanted SBM baggage (Simberi and Atlantic). Silver Lake were happy to make that one as hard as possible for SBM and GMD to push through, and knowing Raleigh's form with Saracen, I don't think he is planning to go slowly - he'll want to roll up everything he possible can around Leonora that has any decent gold.

SLR's 11% of RED just happens to be a bee's whisker above the 10% plus one share that consitutes a minimum "blocking" stake, meaning nobody can takeover all of Red 5 now without getting SLR on board. The compulsory acquisition number is 90%, and SLR's stake prevents everyone else (especially Genesis Minerals) from getting 90% of RED, so Genesis or any other potential acquirer of RED (other than SLR themselves of course) could only ever get a controlling stake, not full ownership, unless SLR agree to sell their stake. This could also be strategic in that Red 5 is not particularly expensive at the minute, and if there is M&A interest - and there will be sooner or later - the value of that 11% will surely increase. It's quite a smart play really. But Raleigh won't like it much!

Genesis Minerals' Raleigh Finlayson.

Silver Lake Resources' MD, Luke Tonkin.

Red 5's KOTH (King Of The Hills) Gold Mine operating near Leonora. Originally owned by Saracen Minerals, the first gold mining company established by Raleigh Finlayson, who now heads up Genesis Minerals. Saracen merged with Northern Star Resources in late 2020 (completed in early Feb 2021) via NST taking over SAR (Saracen), after which Raleigh left NST and started Genesis.

Additional: Actually, RED now has a market value of $917.5m, which is probably getting up there for a single processing plant (KOTH) processing gold from 2 locations (KOTH plus Darlot underground mine, 100km NE of KOTH - the ore is trucked to KOTH for processing). They do not actually look cheap up here to be honest, however I guess they're being priced based on the gold they own that is still in the ground - as shown in this slide:

The KOTH Mill is running consistently at 137.5% of nameplate capacity (5.5Mtpa vs nameplate of 4.0Mtpa), so really hitting its straps, and they have gold out to at least 2037 based on that slide above.

The business doesn't look real good in the rear-view mirror:

$81.9m net debt at June 30, high costs (AISC), lost money in FY23 (negative NPAT).

However, they look better in terms of progress made and future plans.

Source: Red5-FY23-Financial-Results-Presentation.PDF

165.5Koz Au produced in FY23 makes them a decent mid-tier Australian gold producer, and their FY24 production guidance (reaffirmed on August 29th with their FY23 results) is 195,000 – 215,000 ounces at an AISC of A$1,850 - A$2,100/oz. Those costs are high, but that's still a fair amount of gold, and if the A$ gold price stays up around A$2,800 to A$3,000 or higher, they're still making good coin even with those high costs. And their mines are both located in one of the safest and most predictable gold regions globally, the WA central goldfields (north of Kalgoorlie).

They've come a long way from Siana.