RED 5 (ASX:RED) share price up 4% on feasibility study

Gold miner Red 5 emerged from yesterday’s trading halt after releasing the final feasibility study on its King of the Hills project.
The post RED 5 (ASX:RED) share price up 4% on feasibility study appeared first on Motley Fool Australia. –

miner holding gold nugget

ASX gold and resources miner Red 5 Limited‘s (ASX: RED) share price is up 3.81% in early afternoon trading today.

The company emerged from yesterday’s trading halt after releasing the final feasibility study on its King of the Hills project in the Eastern Goldfields region of Western Australia.

Red 5’s volatile share price year

After enjoying a stellar 2019, which saw the Red 5 share price soar in 12 months, 2020 has seen shareholders endure some sharp price swings in both directions.

Like most ASX shares, Red 5 was battered by the wider market selloff driven by COVID-19. From 24 February through 3 April, the Red 5 share price fell 50%. Since the April low, the share price has gained 83%, though by no means in a straight line higher.

Following today’s gains, year-to-date Red 5’s share price is right where it started 2020, at 33 cents per share.

In comparison, the All Ordinaries Index (ASX: XAO) is down 11% over that same time.

What did Red 5’s final feasibility study reveal?

Red 5 said the final feasibility study at its King of the Hills project would usher in Australia’s next major goldmine. It forecasts total life of mine (LOM) production of 2.5 million ounces at all in sustaining costs (ASIC) of AU$1,415 per ounce starting in 2022.

The company said it would take some steps before making a final investment decision in ‘coming months’. These include early site works, acquiring the final permits and project financing, alongside major contract tenders.

The feasibility study indicated updated ore reserves of 64.6Mt @ 1.15g/t Au for 2.4M ounces of contained gold. Red 5 plans a processing rate of 4 million tons per year over the initial 16-year life of mine plan, with the first production scheduled for June quarter in 2022.

Red 5’s managing director Mark Williams said:

The completion of this high-quality final feasibility study, delivering a 2.4 million ounce ore reserve, is a pivotal moment for Red 5 shareholders, for our hard-working team and for communities in the Leonora-Leinster region of the Eastern Goldfield.

Based on a gold price of AU$2,500 per ounce, Williams added:

With strong production in the early years of the mine, the project is well placed to benefit from the favourable gold price environment – with a capital payback period estimated at 25 months for the project’s capital requirement of A$226 million.

With the final investment decision on the mine yet to come, the Red 5 share price will be one to watch.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post RED 5 (ASX:RED) share price up 4% on feasibility study appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!