Emerging gold company Brightstar Resources has announced two key acquisitions to aid its consolidation of the Sandstone region in Western Australia.
Brightstar Resources has entered into a scheme implementation deed with Alto Metals, a gold explorer currently developing its Sandstone gold project situated 600km north of Perth, WA.
Under the agreement, Brightstar will acquire 100 per cent of the Alto Metals shares and each Alto Metals shareholder will receive four new Brightstar shares for each Alto Metals share held on the scheme’s record date, implying a value of about six cents per Alto Metals share.
The scheme implies a fully diluted equity value for Alto Metals of $44.4 million.
The Alto Metals board unanimously recommends that Alto shareholders vote in favour of the scheme, in the absence of a superior proposal.
“The scheme announced today is a key step towards building a significant gold business and provides Alto shareholders with an exciting opportunity to become part of an emerging gold producer,” Alto Metals managing director and chief executive officer Matthew Bowles said.
“In addition to delivering a significant premium, the scheme, if approved and implemented, will allow Alto shareholders to retain ongoing exposure to the development of the Sandstone gold project, as part of a larger resources group holding multiple projects, which will reduce the risks associated with holding a single project.”
“We believe this transaction is a great outcome for Alto shareholders and stakeholders, who will benefit from the development of the Sandstone gold project as part of an enlarged gold company with an exciting future.”
The Sandstone gold project currently has an open-pit gold resource of 17.6 million tonnes at 1.5 grams per tonne of gold for 832,000 ounces.
The Alto Metals acquisition is expected to be implemented on November 13 2024.
Brightstar has also entered into a tenement sale agreement with Gateway Mining, a gold explorer that owns the Montague east gold project located 70km north of Sandstone, WA.
Under the agreement, Brightstar has agreed to acquire 100 per cent of the Montague project for $14 million. Brightstar will hold all the gold minerals rights of the project and Gateway Mining will retain all the non-precious metal rights.
To support both acquisitions, Brightstar launched an equity raising by way of a two-tranche placement to professional and sophisticated investors on August 1 to raise up to $24 million at 1.5 cents per share. On August 2, the company confirmed it had received firm commitments for the equity raising.
Brightstar’s scheme with Alto Metals is conditional on the placement’s completion, but the placement and the Montague project acquisition are conditional on the scheme’s completion.
Brightstar said once the Alto Metals and Montague project acquisitions are completed, it will become a significant junior gold explorer, developer and producer within the Sandstone region of WA.
“This is a compelling transaction for all stakeholders, as the sensible consolidation of the Sandstone and Montague east gold projects delivers an asset base with the critical mass to be advanced towards meaningful production,” Brightstar managing director Alex Rovira said.
“The Sandstone Hub has the mineral endowment and exploration upside to be a significant development opportunity in Western Australia in the coming years and presents as an asset with potential to support Brightstar’s aggressive growth ambitions to become a multi asset mid-tier WA gold producer.
“Brightstar has the team and experience to fast-track the exploration and development of the Sandstone assets in parallel with the development of the Menzies and Laverton gold projects, to underpin Brightstar’s ambitions of becoming a multi-asset producer in WA.”
Subscribe to Australian Mining and receive the latest news on product announcements, industry developments, commodities and more.
.jpg "Leap Unveils New Platform Capabilities to Scale Virtual Power Plants")
