Red 5 Limited (ASX: RED) and Silver Lake Resources (ASX: SLR) have agree to merge, creating a 445,000 ounce per annum mid-tier gold company.
The companies have entered into a binding Scheme Implementation Deed, under which the companies will merge via a Silver Lake Scheme of Arrangement.
Under the terms of the Transaction, Red 5 will acquire 100% of the shares in Silver Lake and each Silver Lake shareholder will receive 3.434 Red 5 shares for every Silver Lake share held. Upon implementation of the Transaction, Red 5 shareholders will own 51.7% of the merged entity and Silver Lake shareholders will own the remaining 48.3%.
The combined entity will be led by Russell Clark as Chairman and Luke Tonkin as Managing Director and CEO. The new board of directors of the combined entity will comprise four directors from each of the current Red 5 and Silver Lake boards.
“This transaction represents a logical merger of two leading mid-tier gold companies and represents an exciting inflection point for Red 5 shareholders following the successful development, ramp-up and achieving steady state production at King of the Hills,” Red 5 Managing Director Mark Williams said.
The merger creates a ~445,000 oz pa diversified gold producer with assets in tier one jurisdictions. With a sector leading balance sheet, the merged entity provides a strong foundation for future growth.”
