From AFR:Red5 launches $138m block trade; Euroz Hartleys on...

From AFR:

Red5 launches $138m block trade; Euroz Hartleys on ticket

Aug 7, 2024 – 4.45pm

West Australian gold producer Red 5 is tidying up its register as it beds down a $2.2 billion merger with rival Silver Lake Resources.

Street Talk understands the company sent out Euroz Hartleys to find buyers for a $138 million stake in Red 5 after Wednesday’s closing bell.

The block trade was priced at 34¢ a pop – at par with the closing price and a 5.94 per cent discount to the five-day volume-weighted average price, according to a term sheet.It’s not your vanilla after-market block trade.

Sources say the shares being sold by Euroz belong to the pre-bid stake that Silver Lake built in Red 5 before the two camps agreed to a scrip merger in February.Usually, companies in a similar situation prefer to cancel these share once the merger comes into effect,But Red 5 has chosen a rarer path, choosing to sell them via Euroz to boost its own $453.7 million cash and bullion balance sheet.

Fund managers know Red 5 has made no secret of its M&A ambitions beyond the Silver Lake deal.In particular, its Deflector mine’s reserves are down to 295,000 ounces of gold – and a replacement needs to be found soon.

The $138 million sell down should go a long way in boosting its M&A firepower, should Tonkin pull the trigger on an acquisition.Final bids were due late on Wednesday afternoon.