Brightstar Resources Inks Consolidation Deals with Gateway Mining and Alto Metals
THE BOURSE WHISPERER: Brightstar Resources (ASX: BTR) has upped the Goldfields consolidation stakes with the inking of deals with two emerging gold exploration plays.
The first is a Binding Agreement signed with Gateway Mining (ASX: GML), under which Brightstar will purchase Gateway’s gold rights within the eastern tenement block of that company’s Montague project.
The deal is profitable to Gateway, which will receive consideration of $14 million, comprising $5 million in cash, $7 million in Brightstar Shares and $2 million in deferred Brightstar Shares (subject to milestones).
Gateway will retain ownership of all other mineral rights (including base metals) within the Montague East Tenement Group, allowing it to continue its base metal exploration on these tenements in line with its recent exploration focus.
Copper-nickel-PGE prospects at Montague East, including the recently targeted Flametree prospect where drilling encountered:
GRC1014
1 metre at 0.72 per cent copper, 0.41 per cent nickel, 1 gram per tonne platinum + palladium (Pt+Pd) from 195m and 1m at 1 per cent copper, 0.39 per cent nickel, 1.2g/t Pt+Pd from 209m (EOH); and
GRC283
4m at 1.03 per cent copper, 0.44 per cent nickel, 0.9g/t Pt+Pd from 137m.
“The deal is structured in a way that delivers immediate cash into our balance sheet while at the same time giving Gateway a seat at the table of an exciting potential emerging consolidation play in the Sandstone region through a significant shareholding in Brightstar,” Gateway Mining managing director Mark Cossom said in the company’s ASX announcement.
“Alex Rovira and his team at Brightstar are working hard to build a significant new gold production company with an exciting growth future, and we are pleased to have been able to participate in what we believe amounts to sensible rationalisation in the belt.”
The ink was barely dry, and Brightstar Resources didn’t get to put the lid back on its biro, with Alto Metals (ASX: AME) tabling papers for a Scheme Implementation Deed (SID) under which Alto agrees to propose a Scheme of Arrangement (Scheme) for acquisition by Brightstar of 100 per cent of Alto.
Under the Scheme, Alto shareholders will receive four (4) Brightstar shares for each Alto share held on the Record Date (Scheme Consideration) giving an implied value of approximately six cents per Alto share, representing a healthy premium of:
– Approx. 82 per cent to the closing Alto share price of 3.3 cents per share on 30 July 2024; and
– Approx. 81 per cent to Alto’s 30-day VWAP of 3.3 cents per share up to and including 30 July 2024.
“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 Matthew Bowles said in the company’s ASX announcement.
“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.”
Brightstar is confident the implementation of the Alto Scheme and completion of the Gateway Montague Acquisition, the company will emerge as a junior West Australian gold explorer, developer and producer of note with a material exploration and development platform.
The upshot from the Scheme and Montague Acquisition will consolidate highly prospective exploration ground in the Sandstone region, complementing Brightstar’s existing production, development and exploration asset portfolio.
“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 Resources 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.”
TO READ THE FULL GATEWAY MINING ANNOUNCEMENT: CLICK HERE
TO READ THE FULL ALTO METALS ANNOUNCEMENT: CLICK HERE