On a pro forma basis, the merged miner would have delivered a net profit after tax of around $80 million from sales of 232,241 ounces and revenue of $657.9 million, with both companies returning to profitability after combined losses of $45 million in the first half of FY23.
Free cash flow could have been around $100 million, with almost 60% coming from Silver Lake.
During the December half Red 5 sold 107,470oz with all-in sustaining costs of $2008/oz, delivering revenue up of 77% to $283.5 million and a NPAT of $29 million thanks to a near doubling of production at both its flagship King of the Hills operation and “right-sized” legacy Darlot asset, and strong gold price.
Cash and liquid assets were $53.3 million, while debts were reduced by $25 million to $103 million.
Silver Lake sold 124,771oz gold equivalent from its operations, generating revenue of $374.4 million and a NPAT of almost $50 million, which included a non-cash tax expense of $23.1 million.
AISC were $1791/oz, a 17% year-on-year improvement compared with FY23’s $2153/oz.
It ended the year debt-free with cash and bullion of $284 million, plus investments worth $131 million, including its 12% in Red 5 – a stake could be sold or the shares cancelled after the merger.
The merger, announced in last month, aims to create a more diverse producer with four production centres and average production of around 445,000ozpa.
Largely for tax reasons, despite higher sales and cash, Silver Lake will be acquired by the indebted Red 5 for the issue of 3.434 Red 5 shares for every Silver Lake share.
Red 5 shareholders will own around 52% of the new gold miner, tipped to be Australia’s fifth biggest, just nipping at the heels of Regis Resources for fourth place.
The combined company would have cash and investments of around $378 million, resources of 12 million ounces and reserves of 4Moz.
