Red 5 shares hit by mine wall collapse

Local gold miner Red 5 says an earthquake registering 6.1 off the coast of Surigao del Norte was a possible contributing factor to the collapse of a wall into the open pit of its Siana project in the Philippines last week.

The earthquake was recorded about a week prior to the wall’s collapse.

In a statement, Red 5 managing director Mark Williams said regular operational activities were continuing at the mine site, including the processing of ore from about 80,000 tonnes worth of stockpiles, and gold production for the September quarter would be unaffected.

However, he said the wall collapse would have an impact on the miner's medium-term mining schedule, as it will now be required to move additional material from the east side of the pit.

Initial engineering work found that together with the removal of the slumped material in the open pit, the perimeter ring drain on the eastern side of the open pit will need to be extended further east.

“This is considered an immediate priority and civil works will commence this week,” Mr Williams said.

“At this point in time, the company expects to manage funding requirements from internal cash resources, which currently stand at $12.8 million, although this will require deferment of some capital expenditure.”

Shares in Red 5 were 22.9 per cent lower to 7.4 cents each at the close of trade.