ASX Code: RED 2 0 -2 2 February 2 0 1 8 Mark W illiam s, - - PowerPoint PPT Presentation

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ASX Code: RED 2 0 -2 2 February 2 0 1 8 Mark W illiam s, - - PowerPoint PPT Presentation

ASX Code: RED 2 0 -2 2 February 2 0 1 8 Mark W illiam s, Managing Director Com petent Persons Statem ent & Disclaim er Com petent Person Statem ent for Exploration Results The information in this presentation which relates to


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2 0 -2 2 February 2 0 1 8 – Mark W illiam s, Managing Director ASX Code: RED

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Com petent Person’s Statem ent & Disclaim er

Com petent Person Statem ent for Exploration Results The information in this presentation which relates to Exploration Results is extracted from the ASX announcement titled High-Grade Drilling Results Confirm Potential for Resource Extensions within Key Mining Area at Darlot released by the Company on 22 February 2018 and is available to review on the ASX web-site at www.asx.com.au. Red 5 confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from that ASX announcement. Com petent Person Statem ents for JORC 2 0 1 2 Mineral Resource and Ore Reserves The information in this presentation that relates to the Mineral Resources at the Siana open pit is extracted from the report titled Siana Gold Project – Open Pit Mining Review and Reserve Update, released on 24 September 2015 and is available on the ASX web-site, figures quoted are reported as at 30 June 2017. The information in this presentation that relates to the Mineral Resources at the Mapawa Project is extracted from the report titled Maiden 289,000oz Gold Resource for Mapawa LSY Deposit, dated 21 October 2015 and is available on the ASX web-site. The information in this presentation that relates to Mineral Resources for the Siana Underground is extracted from the report titled Siana Underground Mineral Resource dated 23 February 2016 and is available on the ASX web-site. The information in this presentation that relates to Ore Reserves at the Siana Underground is extracted from the report titled Siana Gold Project: Underground Mine Approved for Development Following Completion of Positive Updated Feasibility Study dated 14 June 2016 and is available on the ASX web-site. The information in this presentation that relates to the Mineral Resources for the Darlot Underground deposit and the information in this presentation that relates to the Ore Reserves for the Darlot Underground deposit is extracted from the report titled Maiden 895koz Resource and 131koz Ore Reserve for Darlot Gold Mine Sets Foundation for Gold Production Outlook for 2018, dated 21 December 2017 and is available on the ASX web-site. Red 5 confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Persons findings are presented have not been materially modified from the original market announcements. Forw ard-Looking Statem ents Certain statem ents made during or in connection with this presentation contain or comprise certain forward-looking statem ents regarding Red 5’s Mineral Resources and Reserves, exploration activities, project development operations, production rates, life of mine, projected cash flow, capital expenditure, operating costs and other economic performance and financial condition as well as general market outlook. Although Red 5 believes that the expectations reflected in such forward-looking statem ents are reasonable, such expectations are only predictions and are subject to inherent risks and uncertainties which could cause actual values, results, performance or achievem ents to differ materially from those expressed, implied or projected in any forward looking statem ents and no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statem ents as a result of, am ong other factors, changes in economic and market conditions, delays or changes in project developm ent, success of business and operating initiatives, changes in the regulatory environm ent and other governm ent actions, fluctuations in metals prices and exchange rates and business and operational risk managem ent. Except for statutory liability which cannot be excluded, each of Red 5, its officers, employees and advisors expressly disclaim any responsibility for the accuracy or completeness of the material contained in this presentation and excludes all liability whatsoever (including in negligence) for any loss or damage which may be suffered by any person as a consequence of any information in this presentation or any error or omission. Red 5 undertakes no

  • bligation to update publicly or release any revisions to these forward-looking statem ents to reflect events or circumstances after today's date or to reflect the occurrence of

unanticipated events other than required by the Corporations Act and ASX Listing Rules. Accordingly you should not place undue reliance on any forward looking statement.

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Shareholders

Our Com pany Vision

“To be a successful multi-operational exploration and mining company, providing benefits to all stakeholders, through the consistent application of technical excellence, and responsible and sustainable industry practices.”

  • Kevin Dundo

Chairman

  • Mark Williams

Managing Director

  • I an Macpherson

Non-executive Director

  • Colin Loosemore

Non-executive Director

  • John Tasovac

Chief Financial Officer

  • Steve Tombs

General Manager

  • Frank Campagna

Company Secretary

Red 5 – Corporate Sum m ary

1 9 .9 1 4 .6 1 0 .5 8 .4 5 .1 4 1 .5 St Ives/ Gold Fields Franklin Resources Inc. Saracen Minerals Ruffer LLP Matchpoint Asia Fund Other

Share Price

(at 20/02/18)

A$0.071 Issued Shares

(undiluted)

1,240.7M Market Cap

(at 20/02/18)

A$88.0M Enterprise Value

(at 20/02/18)

A$66.2M Debt

(at 20/02/18)

Nil Cash/Bullion

(at 31/12/17)

A$21.8M

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Red 5 Projects: 2 .4 Moz Resource I nventory

1 See Competent Persons Statement on Slide 2 for further information regarding Resource and Reserve estimates

Darlot Gold Mine, W A

  • Underground mining
  • CI L process plant

King of the Hills Gold Project, W A

  • Underground mining
  • Trucking and processing ore at Darlot

Total JORC Resource I nventory1: 1 .3 Moz

Siana Gold Project, Philippines

  • Open pit and underground mining
  • CI L process plant
  • Operations temporarily suspended

Mapaw a Project, Philippines

  • Development opportunity

Total JORC Resource I nventory1: 1 .1 Moz

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SLIDE 5

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Consolidation and Grow th Strategy – W A

  • New Australian gold producer following successful acquisition of two

projects in the prolific Yandal and Leonora greenstone belts:

  • Darlot Gold Mine – operating UG mine with 2.7Moz gold production

history, 0.83Mtpa plant, extensive infrastructure (acquired from Gold Fields)

  • King of the Hills (KOTH) – UG mine with 1.9Moz gold production

history, extensive infrastructure (acquired from Saracen Minerals)

  • Central processing hub at Darlot mill/ infrastructure
  • Recently upgraded JORC 2012 inventory of 895koz Resource and 131koz

Ore Reserve at Darlot – underpins strong production outlook2

  • Mining underway at King of the Hills, 80km south of Darlot – 402koz

JORC Resource3

Red 5 – W A Project Locations

  • Stage 1 Mine Plan: maximise Darlot mill throughput over next 3-4

years by processing ore from both Darlot and King of the Hills

  • Stage 2 Mine Plan: increase Reserves by undertaking near-mine,

regional exploration and future consolidation

  • 2. Red 5 ASX release, Combined New Mineral Resource (JORC 2012) at Darlot, 21 December 2017
  • 3. Saracen Minerals Resource and Reserve Statement, 2 August 2017
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Grow th Potential – Against Peers

Source: Share Prices from ASX 13 Feb 2018, company data from company releases up to 9 Feb 2018

Projects w ith processing option in place or close to com m issioning ( average A$ 1 3 0 / oz) Projects w ith no current processing option ( average A$ 6 0 / oz)

  • Red 5’s JORC 2012 Resource inventory includes 1.3Moz in Australia and 1.1Moz in the Philippines

Based on its Australian Resources alone, it is trading at an Enterprise Value of A$ 4 7 / Resource oz

  • Comparable peers with installed processing plants are trading at an Enterprise Value/ Resource oz in the

range of A$ 1 0 9 -1 1 2 / oz

  • Comparable peers with no current processing option are at an Enterprise Value/ Resource oz in the range of

A$39-44/ oz and require a significant capital outlay to move into production On this metric alone, Red 5 is undervalued on its Australian assets and even more so if Philippines’ Resources, including a fully operational processing plant, are included

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  • Acquisition completed 2 October 2017
  • Gold production of 17,777oz and gold sales of

16,150oz for Dec 2017 Quarter; AI SC A$1,291/ oz

  • Multiple working areas including higher grade CDA

Oval workings (Centenary mine)

  • Key focus on mining areas in upper and mid-levels of

the mine – previously identified to have been sterilised

  • Promising results to date from remnant mining in first

three extensional areas

  • Marsh, Walters, Bradman
  • Flexible mining strategy to accommodate multiple

underground ore bodies

  • “Right-sizing” mining equipment
  • Three new Volvo A45G articulated trucks mobilised

under 36-month leasing arrangement – first significant capital investment ($2.3M) in several years

  • Focus on cost reductions and improved efficiencies

Darlot – Mining and Operational Strategy

New Volvo trucks being utilised at Darlot m ine site

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  • Updated JORC 2012 Resource of 6.0Mt @ 4.6g/ t for 895koz –

four-fold increase in contained ounces over previous Gold Fields SAMREC Resource estimate4, primarily due to:

  • Inclusion of areas previously considered sterilised
  • Reduced mining cut-off grades
  • Inclusion of new areas not previously quoted
  • Maiden Probable Ore Reserve of 1.0Mt at 4.0g/ t Au for 131koz
  • Updated Reserve targeted for mid-2018, with increases expected

within current Resource area and extensions

  • Potential for strong Reserve growth with Resource-to-Reserve

conversion anticipated to increase as:

  • Custom stope designs are completed for each Reserve block
  • Current Reserve is the product of ~one month of stope

design work

  • Several lodes remain open in all directions including closer to

surface, and as yet unmined lodes like Burswood are awaiting development

Grow th Potential – Resources & Reserves

I som etric view of Darlot underground m ine show ing key resources and m ining areas

  • 4. SAMREC 2016 Mineral Resource of 224,000oz, as per Gold Fields Resource and Reserve Supplement 2016 p.69 and p.71

Oval

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  • Underground diamond drilling

commenced January 2018 targeting immediate western and down dip extensions of the CDA Oval resource

  • Extensions along strike and down-

plunge can be readily accessed from existing infrastructure

  • Early drilling success with significant

new intercepts including5,6:

  • 12.9m @ 7.9g/ t (Hole GC3748)
  • 4.0m @ 9.4g/ t Au (Hole GC3746)
  • 5.0m @ 8.2g/ t (Hole GC3747)
  • 6.0m @ 5.1g/ t (Hole CAD0396)

Grow th Potential – Near-Mine Extensional Drilling

  • 5. Red 5 release, High-Grade Drilling Results Confirm Potential for Resource Extensions within Key Mining Area at Darlot, dated 22 February 2018
  • 6. Metres quoted are estimated true widths, no grade cuts have been applied. Hole GC3748 includes 3.2m @ 0.2 g/ t internal dilution.

GM values in accompanying figure are calculated using down hole widths

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Darlot – An Explorer’s Delight

  • Rich goldfield with production of 2.7Moz over a 28-year operating

history7

  • Positioned in the heart of the highly prospective Yandal Greenstone Belt
  • Total land-holding of approximately 13,900ha with tenements in good

standing – minimal third party royalties

  • Large, structurally controlled ore system with significant opportunities

for extensions and new discoveries

  • Numerous ore grade intercepts recorded over multiple prospect areas

and not followed-up to date = walk-up drill targets

  • Acquisition included extensive database of high-quality 3D seismic data

acquired in late 2016 to early 2017 (~ 75km 3 or ~ 25km 2 surface area x ~ 3km depth) 3 D seism ic has played a critical role in m ajor new discoveries in

  • ther w ell-established gold field projects
  • 7. Minex Consulting compilation of historical production July 2017
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SLIDE 11
  • Extensive available datasets include:
  • Induced Polarisation survey data
  • Tenement-wide multi-element geochemistry
  • Mineral deposit fingerprinting
  • Alteration mapping – spectral data analysis
  • Airborne and detailed ground magnetics
  • 3D Seismic – near-mine structural and

stratigraphic framework

  • Deformation intensity mapping and delineation of

structural/ mineralisation corridors

  • Multiple exploration targets identified along structural

and stratigraphic trends

  • Strong correlation between geophysical, geochemical

and geological vectors

  • Pipeline of ranked exploration and resource targets
  • Drill programs proposals prepared and ready to go

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Darlot – A System atic Build-up of Know ledge

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Darlot – Multiple Near-Surface & Deep Targets

Darlot - Key underground targets Aurora Target – strong multi-element geochemical target along strike from Centenary W aikato Open Pit – Magnetic Target - near surface resource in- fill drilling and extensional opportunities along north-west trending magnetic high feature (Waikato Shear Zone) W aikato I P, Thrust Repeat Mine Targets SRK Consulting engaged to conduct high-level pit

  • ptim isations on a series
  • f sm all historical pre-

JORC 2 0 1 2 resources near Darlot

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SLIDE 13
  • Priority target area located just 1km south-east of existing

Centenary operation

  • A doppelgänger for the Centenary Mine:
  • Sits in the sam e host m agnetic dolerite position as

Centenary

  • Has 1 3 of the 1 5 geochem ical characteristics that

define Centenary

  • Minimal drilling in the area
  • ~ 1200m drill hole designed to drill across the Pipeline and

Carnegie faults (Oval/ Lords type structures) commenced mid-February 2018

  • Drilling partially funded by $100,000 Exploration I ncentive

Scheme grant

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A1

Aurora – Looking for Centenary Repeat

Aurora El Dorado Fault Group Planned drill hole

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  • 2km of largely untested strike potential
  • High priority walk-up drill targets identified:
  • Magnetic high feature 300m NW of Waikato North

and 400m SE of Waikato South

  • 400m section of magnetic high response between

Waikato and Waikato South

  • Waikato trend has the same strike direction and

similar length as the Darlot deposit – potential Darlot analogue

  • Minimal drilling, with outstanding potential to discover

a significant new deposit at surface and at depth

  • Down-dip continuity untested

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Darlot-Centenary

Magnetics 3D Seismic

W aikato Open Pit – Magnetic Target

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SLIDE 15
  • Strong I nduced Polarised chargeability response

coincident with magnetic stratigraphy (Mt Pickering Dolerite):

  • Intersected by major regional Oval and Lords

structures, with El Dorado fault located to the east

  • Cut by repeat thrust structure which at surface

correlates with 2km NW trending Waikato Target

  • Previous drilling has not tested the Oval and Lords

structure in this search space

  • Strong coincident geochemical anomaly
  • Potential near-surface thrust-hosted repeat of Darlot

Centenary system

  • Surface drilling planned later this year

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Magnetics IP and 3D Seismic

W aikato Deep – I P, Thrust Repeat Mine Targets

Planned drill holes

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Lords High Amplitude CDA Lords Felsics Oval North West Oval Flattening El Dorado North El Dorado South Lower Western MMD

  • Lords High Am plitude – identified in seismic data, is

along strike of major mine controlling structure, nearby I nverse Polarisation response, ~ 700m from UG infrastructure

  • Oval North W est – immediately adjacent to known

resource within Centenary system

  • Lords Extensions/ CDA Lords Felsics – immediately

adjacent to known resource and within Centenary system, ~ 150m from existing underground infrastructure

  • Oval Flattening – 3D seismic target, untested area
  • Eastern Lim b MMD North – 3D seismic target,

untested area

  • Eldorado North and W estern Lim b MMD, Eldorado

South and Low er W estern MMD – proximal to major structures crucial for Centenary deposit

Darlot – Key Underground Targets

Multiple underground targets to be progressively drill tested from existing UG w orkings over the course of 2 0 1 8

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  • Located in prolific Leonora Greenstone Belt
  • Underground Indicated and Inferred Resource of

2.71Mt @ 4.6g/ t Au for 402koz3

  • Underground mining, grade control and Resource

drilling commenced January 2018

  • Studies underway on potential to beneficiate low-

grade ore

  • Favourable initial results from test work to assess

heap leach amenability of existing low-grade stockpiles and open pit ore

  • Established site infrastructure adjacent to

Goldfields Highway and close to Leonora

  • Significant near-mine exploration potential –

existing deposit remains open in all directions

  • Multiple lodes extending over 1.95km and open at

depth, providing numerous exploration drilling targets

  • Potential for similar gold endowment to Darlot, but

exploration is far less advanced

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Significant upside from exploration to extend the deposit at depth

Source: Saracen Minerals presentation, 7 September 2016, p15

King of the Hills Mine – Grow th and Upside

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  • 11,751 ha tenement package in the Leonora Greenstone

Belt, complete with extensive high-quality exploration datasets:

  • High resolution magnetics
  • High resolution gravity
  • 2D seismic lines (over deposit position)
  • Tenement wide soil geochemistry
  • RAB/ AC drilling – TOFR sampling
  • Tenement wide multi-element geochemistry
  • Tromino passive seismic survey
  • Multiple gold prospects identified along NW trending

structural corridors, with priority targets including:

  • Eclipse
  • Cerebus
  • Centauri
  • Rainbow North

King of the Hills – Regional Targets

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Siana Gold Project, Philippines

  • Mining suspended at Siana Gold Project in April 2017 in response

to regulatory delays

  • Suspension plan rapidly and effectively implemented to preserve

the significant retained value of the large in-ground gold inventory at Siana

  • During the period of suspension, environmental and regulatory

compliance at Siana being maintained, including community relations and de-watering of the open pit

  • New Philippines Secretary of Department of Environment and

Natural Resources (DENR) appointed in May 2017. Appointment confirmed by Commission of Appointments in October 2017

  • Underground mine development commenced, with 445m of

development completed, portals and important surface infrastructure established and costs reduced

  • Revised metrics for the underground were released in June

2017, including Life-of-Mine production of 504koz at an average All-in Sustaining Cost of US$790-US$840/ oz, and a maximum cash draw of US$46M8

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Siana Underground: Cross-section at 5 5 1 0 0 N

  • Based on 8-year production mine life

mining 3.8Mt at head grade of 4.6g/ t gold equivalent to produce 504,000oz of gold8

  • 8. Red 5 ASX release “Siana Gold Project and Company Update”, 20 June 2017
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Red 5 Lim ited – Sum m ary and Outlook

  • Dynamic growth strategy in the Australian gold sector underway, while

preserving inherent value of Philippines projects

  • The combination of Darlot and King of the Hills provides:
  • A commanding 25,700ha footprint in the highly-endowed Leonora-

Leinster gold district

  • Total JORC 2012 Mineral Resource inventory of 1.3Moz gold
  • Immediate production
  • Significant exploration and growth potential
  • On EV / Resource oz, Red 5 is undervalued
  • Darlot Gold Mine provides the opportunity to establish a central processing

hub to unlock neighbouring gold deposits in the region

  • Potential bolt-on neighbouring project opportunities
  • Red 5 management team has strong operating experience in the gold

sector – well placed to unlock the significant value of the assets acquired

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Strategic position in w orld-class Australian gold belts

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ASX Code: RED

Thank-you.

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