Red 5 Limited (ASX: RED) (Red 5 or the Company) has made a $125 million share placement to sophisticated and professional investors at $0.18 per share (Placement) to underpin the next pivotal phase of its growth pathway to becoming a multi-asset, mid-tier Australian gold producer.

The Placement was oversubscribed with both existing shareholders and new Australian and international institutional investors participating.

The Placement de-risks the funding requirements to develop the proposed integrated bulk open pit and underground mining and processing operation for the KOTH Gold Project in Western Australia, with a Final Feasibility Study due for completion in the September 2020 Quarter.

The Placement will be completed in two tranches, with the second tranche of the Placement subject to shareholder approval at a general meeting of the Company expected to be held on 6 May 2020.

The two tranches comprise: Tranche one - 171.5 million shares ($30.87 million), expected to settle on 3 April 2020 and Tranche two - 522.94 million shares ($94.13 million), expected to settle on 12 May 2020, following shareholder approval.

The Red 5 Board will contribute $0.47 million to the second tranche of the Placement, subject to shareholder approval. Petra Capital acted as sole lead manager and sole bookrunner to the Placement and Canaccord Genuity (Australia) acted as Broker to the Placement.

Red 5 Managing Director, Mark Williams, said: 'We are delighted with the strong support received from existing and new investors, particularly given the current challenging equity market environment.

'In particular, I would like to thank our existing shareholders for their ongoing support and welcome a number of new institutional investors to our register.

'This strong outcome reflects the market's confidence in the growth pathway we have mapped out, which will see Red 5 evolve into a multi-asset, mid-tier gold producer over the next two years. The capital raising significantly de-risks our funding requirements at King of the Hills, which is now well established as one of Australia's premier emerging gold projects.'

'The completion of this Placement puts us in a strong position to transition efficiently into project development following the completion of the bulk mining Final Feasibility Study in the September 2020 Quarter.

'We will also be well placed to maintain our long-term focus on exploration, which has already created significant value for our shareholders. We expect this to continue as we maintain our investment in exploration at Darlot as part of our Darlot Mining Hub Strategy and continue to explore the broader King of the Hills system and surrounding tenements.'

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