SLR -8.33%: the gold miner gave up early gains after disclosing it was the buyer of an $84m position in Red 5 (RED) this morning. The 11% stake traded at 26c, an 18% premium to Friday’s close. Silver Lake said the purchase was strategic, getting them a seat at the table of the junior gold miner and leaving the door open for a potential takeover. Red 5 owns the King of the Hills and Darlot mines near Leonora in WA with a total Mineral Resource estimate of 6.2Moz as of June 30. There have been a number of assets changing hands in the area over the last year, the most recent being Genesis (GMD) buying St Barbara’s (SBM) Gwalia mine last year. Silver Lake unsuccessfully tried to squeeze their way into that deal, now turning their attention elsewhere, putting some of the $333m cash and bullion available as at 30 June to work. A deal would make sense here given the company already has significant exposure in the region with the processing capacity at King of the Hills likely the key interest for Silver Lake.
MM remains long and bullish SLR
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