Black Cat Syndicate ups Gold Production Ante via Lakewood Processing Facility Acquisition
THE BOURSE WHISPERER: Black Cat Syndicate (ASX: BC8) has amped up its gold producing potential having struck a binding agreement with Westgold Resources (ASX: WGX) to acquire that company’s gold processing facility.
Black Cat Syndicate is acquiring Westgold’s operating, 1.2 million tonnes per annum Lakewood processing facility located on the outskirts of Kalgoorlie and within 40 kilometres of Black Cat’s 100 per cent-owned Kal East Gold Operation.
The deal makes sense for Black Cat as it expands throughput capacity of +50 per cent (from 0.8Mtpa to 1.2Mtpa), allowing the company to produce more gold sooner.
Black Cat’s production plans can be brought forward by approx. 15 months ensuring it can take immediate advantage of the current high gold price environment.
A consideration of $85 million to close the deal is comprised of $70 million in cash, in staged payments over nine months and $15 million worth of Black Cat shares, at an issue price of $0.76 per share and escrowed for 12 months from the date of issue.
The cash payable at completion is immediately available from existing cash, with future payments to be funded from operating cashflows.
“This is another transformational step in our plan to produce more gold sooner,” Black Cat Syndicate managing director Gareth Solly said in the company’s ASX announcement.
“The acquisition of the 1.2Mtpa Lakewood processing facility accelerates Kal East by 15 months, eliminating the risks associated with construction.
“We have a 1.3 million ounce Resource base near Lakewood with deposits open along strike and at depth.
“This acquisition provides a pathway to harvest the cash from Kal East, complemented by ongoing drilling and growth.
“We look forward to running Lakewood which is on the doorstep of Kalgoorlie and has previously been pivotal in the growth of Silver Lake Resources (now Vault Minerals) and Karora Resources.
“We are thrilled to be able to announce this acquisition as we continue to transform into a significant WA gold miner, producing more gold, sooner.”
TO READ THE FULL ANNOUNCEMENT: CLICK HERE
