PERTH-based Star Minerals has received A$5 million in pledges with its gold Initial Public Offering (IPO) on track to launch on the Australian Securities Exchange (ASX) in the first week of October, 2021.
Star Minerals’ flagship asset is the mine-ready gold resource at Tumblegum South, 40km south of Meekatharra in Western Australia.
Tumblegum South is currently owned by Bryah Resources.
Last week Sydney-based Magnolia Capital Group pledged to take up $2.5 million of the $5 million sought for the Star Minerals IPO. Star Minerals will use the funds to buy Tumblegum South for $500,000 in cash, nine million shares and seven million performance rights. The offer was priced at A$0.20 a share.
We are delighted to be taking this mine-ready deposit to the next stage and looking forward to ringing the bell in early October,” Star Minerals CEO, Greg Almond, said.
“An extensive drilling campaign is planned. This campaign is likely to start before Christmas, 2021. Our point of difference to other gold IPOs is we have an actual gold resource and a pathway to gold production.
“The market has recognised that and it has been an important factor in the successful fund raising – investors are impressed that we are bringing a mine-ready asset to market.
“The outlook for the gold price is expected to remain high, and this IPO has capitalised on that trend. “Initial funds will be focused on completing drilling, environmental and engineering work in order to get Tumblegum South ready to mine.
“The intention is to mine the pit using a contract fleet, at an appropriate rate, and sell ore to a processing partner. The initial operation will be of low capital intensity, and that process will provide a cash influx to fund our further activities.”
At Tumblegum South, there is an Inferred Resource of 600,000 tonnes at 2.2gpt Au (42,500 ounces of gold).
A Mining Lease has already been granted. Star Minerals’ second project, West Bryah, covers 349sqkm of highly prospective tenements, 10km north of Meekatharra in Western Australia.
Star Minerals’ second project, West Bryah, covers 349sqkm of highly prospective tenements, 10km north of Meekatharra in Western Australia.
Mr Almond also said he would like to thank many of the shareholders of Bryah Resources and Australian Vanadium (ASX: AVL) who backed the Star Minerals IPO. “Support from BYH and AVL shareholders has been crucial in fund raising and satisfying conditions concerning spread,” he said.
Blackwall Legal provided legal advice while Nexia is the lead accountant.
As Star Minerals’ develops Mr Almond said the corporate strategy would look to develop mutually-beneficial joint ventures with third parties.
The chair of Star Minerals, Ian Stuart, is also the chair of Bryah Resources, while Ashley Jones and Stephen Strubel are non-executive directors. On completion of the IPO, Bryah will hold a 21% shareholding of Star Minerals.
