Red 5 says it has not closed the door to a deal with its acquisitive larger rival Genesis Minerals, creating a West Australian gold mining powerhouse, despite announcing a $2.2 billion merger with another nearby operator, Silver Lake.

Genesis, the operator of the massive Gwalia mine, is backed by prominent resources industry figure Raleigh Finlayson, and had long been expected to target Red 5 as it consolidated the state’s Leonora gold district. Brokers, however, are less convinced that Mr Finlayson has an appetite to spoil the deal with Silver Lake.