Aurumin gives nod to Brightstar merger for | Australian Markets

A compelling link-up between Aurumin Limited and Brightstar Resources will see the consolidation of their respective Sandstone gold belongings into a main gold useful resource, about 520 kilometres northeast of Perth in Western Australia’s Goldfields area.

Both corporations introduced at the moment that they’ve entered a scheme implementation deed, below which Aurumin will suggest a scheme of association between the company and its shareholders.

The scheme will pave the best way for a scrip-based deal enabling Brightstar to purchase Aurumin through one Brightstar share for each 4 Aurumin shares.

The scheme consideration implies a worth of 12 cents per Aurumin share, based mostly on a 48c price per Brightstar share. The 48c share price relies on binding commitments Brightstar has obtained to raise $50 million earlier than prices from a placement priced on the 48c stage to fast-track the company’s growth plans throughout its spectacular gold portfolio.

Notably, the position just isn’t conditional on completion of the share scheme.

A price of 12c per Aurumin share represents a 21 per cent premium to its 9.9c closing price final Friday, July 17, and a 20 per cent premium to the company’s share price of 10c on June 27, when the initial joint announcement revealed merger discussions between the 2 corporations.

Additionally, the 12c share price is a 27 per cent bounce above Aurumin’s 30-day volume-weighted average price of 9.4c.

The scheme consideration additionally implies an equity worth of $60 million for Aurumin and an enterprise worth of $62 per gold ounce, based mostly on the company’s mineral useful resource of 950,000 ounces grading 1.5 grams per tonne (g/t) gold.

Aurumin’s board maintain 16 per cent of Aurumin’s issued shares and has unanimously really helpful the share scheme. All the company administrators intend to vote in favour of the scheme, within the absence of a superior proposal and subject to an unbiased knowledgeable concluding the share scheme is within the best curiosity of Aurumin shareholders.

The transaction introduced at the moment is an thrilling development as we consider that combining Brightstar and Aurumin will underpin the mining future of this important Sandstone area. Given our adjoining mineral assets, this transaction makes good business sense for us, and it’s incredible that now we have now been ready to agree on phrases to make this consolidation a actuality.

Brightstar Resources managing director Alex Rovira mentioned: “This is a compelling transaction for all stakeholders, and we believe that combining Aurumin and Brightstar represents a unique opportunity to build a Western Australian gold business of genuine scale with demonstrable upside that also de-risks future development activities and operations at Sandstone.”

Bringing the 2 corporations’ adjoining tenement portfolios below one roof would remove the possession fragmentation that has long annoyed development within the Sandstone district.

The end result would supply for a single gold development alternative on granted mining leases with scale, grade and placement, enabling the project to fast-track into manufacturing.

Brightstar would ship gold-rich belongings equivalent to its Lord Nelson and Lord Henry deposits, and the Vanguard and Indomitable Camps, to the merger. The company’s world useful resource sits within 13 deposits and totals 1.553 million ounces working at 1.5g/t gold.

Aurumin would contribute its Two Mile Hill underground useful resource and its 570,000 ounces, as well as to a suite of shallow open pit alternatives, together with Shillington and Plum Pudding.

Aurumin additionally holds an important asset with its dormant 500,000 tonne-per-annum carbon-in-leach plant. While it hasn’t been fired up for a few years, the ability is absolutely licensed and has permitted tailings storage, a water bore discipline and an on-site camp.

Even higher, it sits on freehold land, 12km from the Sandstone township.

Notably, practically all of the assets from each corporations sit on granted mining leases, offering a strong basis for mine planning and allowing.

If the scheme proceeds to completion, Brightstar will transfer up the ranks of WA’s present crop of builders and producers. It will maintain an spectacular, mixed mineral useful resource of 2.4M ounces of gold at 1.5g/t from the mixed Sandstone belongings and a hefty mineral useful resource of 3.9M gold ounces throughout its Sandstone, Laverton and Menzies initiatives.

Upon receiving the position proceeds of $50 million, Brightstar shall be sitting on a $63 million mountain of money. It will control a strategic 1600 sq. kilometre patch of ground in Sandstone, enabling the company to set up a district-scale open pit development alternative. It plans to unveil a preliminary feasibility examine on the consolidated asset base within the first half of subsequent 12 months.

After completion of the scheme, Brightstar shareholders will comprise about 82 per cent of the merged entity, with Aurumin shareholders accounting for the remaining 18 per cent.

Aurumin shareholders are anticipated to benefit from more publicity to Brightstar’s WA gold initiatives, share possession in a bigger WA-based gold company that will offer enhanced trading liquidity and a doable optimistic market re-rating, together with a probably shorter timeframe to develop its Central Sandstone project.

The Sandstone area has at all times been thought-about extremely potential for a main gold mining operation – this time that expectation may be realised.

Is your ASX-listed company doing one thing fascinating? Contact: [email protected]