New ownership of a dormant White River-area gold mine could be in place by June.
Shareholders of Silver Lake Resources, an Australian gold company, will vote an upcoming May 31 special meeting to approve the sale of company to Red 5 Ltd, a Western Australian gold miner.
The deal is being pitched as a “merger of equals” in which Red 5 will acquire all of the shares in Silver Lake in a $2.2-billion Australian ($1.9 billion Canadian) proposed acquisition announced last February.
Silver Lake’s board of directors have endorsed the merger and are encouraging shareholders to do the same at an upcoming May 31 meeting. If all goes well, the merger deal will be finalized on June 19.
The two companies did not say when the underground mine might resume production.
Under the terms of this transaction, each Silver Lake shareholder will receive 3.434 Red 5 shares for every Silver Lake share held. Once the dust settles, Red 5 shareholders will own 51.7 per cent of the merged company with Silver Lake shareholders owning the remaining 48.3 per cent.
Silver Lake picked up the Sugar Zone Mine, 30 kilometres north of White River, in a CCAA sale involving Harte Gold in early 2022. The new ownership, at that time, decided to halt operations last summer and reassess the gold resources in and around the underground mine with an extensive drilling program, while making investments in modern equipment and infrastructure to upgrade the operation to make it a cost-efficient mine.
At last count, Sugar Zone holds 506,000 ounces in reserves and an estimated 1.5 million ounces in measured and indicated resources.
With five drill rigs turning on the property, Silver Lake has been running a combination of infill drilling around the main deposit, to chase high-grade gold shoots close to the mine, and regional exploration drilling to gain a better understanding the area’s geology and mineralogy.
