Lion Selection Group (ASX: LSX) has committed to invest $4.3 million as part of a $24 million equity fund raising announced by Brightstar Resources (ASX:BTR).
The fund raising is being conducted alongside a strategic consolidation of gold projects, whereby Brightstar has agreed to acquire Alto Metals (ASX:AME) via a scheme of arrangement and purchase the Montague East Gold project from Gateway Mining (ASX:GML).
The Alto and Gateway’s projects are located in the Sandstone-Gidgee region of Western Australia and contain large, close to surface established gold resources. Lion is already a shareholder of Brightstar and Alto and assuming both the acquisition deals are completed, following completion of the raising Lion will become a 5.1% shareholder in Brightstar.
“Lion is very pleased to see these deals come together. We expect Alex and his team to be terrific custodians of gold assets, and we admire their strong vision,” Lion CEO, Hedley Widdup, said.
“Brightstar is unique in the proximity of some of its existing Resources to established process facilities, and this enables them to potentially generate cash flow from toll treatment or ore sales, for minimal capital investment.
“On completion of the Alto scheme and Montague purchase, Brightstar will control a sizeable ground position with numerous shallow and open gold resources which creates a multi-million ounce gold company, that is well funded to aggressively expand resources.
“We think the use of cash flow to fund aggressive exploration and eventually contemplate development of a large new gold project in the Sandstone region has the potential to catapult Brightstar into the ranks of being a significant gold producer. This combination of people, strategy and assets makes Brightstar a wonderful cornerstone to Lion’s portfolio.”
Brightstar has established gold resources at Laverton and Menzies, which are the subject of a feasibility study at present and feature a combined Mineral Resource of 1.46Moz of gold grading 1.6g/t.
A scoping study released in September 2023 contemplated gold production commencing via processing of Brightstar ores at regional process facilities, and the resultant cash flow enabling the rejuvenation of Brightstar’s own process plant near Laverton.
