JOHANNESBURG (miningweekly.com) – A wholly owned subsidiary of the Australian Stock Exchange-listed mining company Red 5 has bought the Darlot gold mine in Western Australia from South Africa’s Gold Fields for A$18.5-million.

In the past three years, Darlot produced more than 241 000 oz of gold.

The Johannesburg Stock Exchange-listed Gold Fields, headed by CEO Nick Holland, has owned Darlot since 2013, which it bought as part of the acquisition of Barrick Gold’s Yilgarn South assets.

Payment comprises A$12-million in cash plus 130-million Red 5 shares, with the cash component made up of A$7-million in advance and A$5-million deferred for up to 24 months.

Gold Fields may elect to take the deferred amount in additional shares in Red 5 or as cash, at Gold Fields’ election, the companies said in releases to Creamer Media’s Mining Weekly Online on Thursday.

To assist with the funding of the cash component, Red 5 intends to undertake a rights issue which Gold Fields will underwrite up to A$7-million.

Red 5 has also entered into a binding agreement to acquire the King of the Hills gold project from West Australian midtier gold producer Saracen Mineral Holdings.

The acquisitions give Red 5 a presence in Western Australia’s Leonora-Leinster mineral district from which to leverage regional consolidation with the Darlot mill serving as a central processing hub.

The Red 5 group also owns the Siana gold project, which is on care and maintenance and Mapawa, located 20 km north of Siana, in the Philippines.