Tim Goyder-chaired Minerals 260 has filed documents to acquire the Bullabulling gold project, located 25km south-west of Coolgardie.
Tim Goyder-chaired Minerals 260 has filed documents to acquire the Bullabulling gold project, located 25km south-west of Coolgardie.
Under the agreement, the gold aspirant will pay a $156.5 million cash consideration to Norton Gold Fields – a subsidiary of Zijin Mining – along with an additional $10 million scrip-based payment.
The gold aspirant has already paid a $2 million deposit upon filing the documentation to acquire Bullabulling, a project which contains 2.3 million ounces of gold.
In a nutshell, the acquisition price of $166.5 million equates to $74 per ounce.
Minerals 260, which is pushing to become a mid-tier gold producer, told the market it would fund the proposed transaction by way of a non-underwritten public offer – of which Argonaut Securities and Bell Potter Securities have been appoint joint lead managers.
It is unclear at this stage how much the raise will be, along with how much extra funding will be required for Bullabulling to reach a positive final investment decision.
“The information about the capital raise and the prospectus will come out very soon,” Minerals 260 managing director Luke McFadyen said.
During Tuesday morning's conference call, Mr Goyder was optimistic about Bullabulling's future.
"We're excited about this project," he said.
"It's all about opportunity. It's all about trying to build a company and that's what us as directors are focused on.
"And we believe there's opportunity that this project will deliver for us. And there's no reason why we can't build a substantial company.
"And you just look at some of our peers who are actually mining now - on similar deposits and {see} what market caps can be achieved."
Mr Goyder became company chair last month, following a stint with the company as a director. He tipped the junior's team would likely grow in coming months.
"We've got a good small team," he said.
"We know what we need to do now. We're going to be building on that team. It's very similar to what we did at Liontown some years ago - and we know what we've achieved there - we just finished building a $1 billion plant there at Kathleen Valley.
"It's about people. It's about shareholders. We look forward to getting on the ground, drilling, getting into those studies.
"We won't be doing a thesis - we want to do it in good timing and with good people.
"My phone has been ringing this morning {with calls} from engineers, drilling contractors... all sorts of people wanting to get involved in this project."
These sentiments were echoed by Mr McFadyen, who said he was hopeful the company wouldn't have to wait to generate its first revenue following a positive final investment decision.
"We can’t wait to get this thing into production,” he said.
“We do need to do a study – but all the points we are building off – the drilling, with the traditional owner agreement, and with the infrastructure nearby, you will see us move as quickly as possible.
“But we do need to do a study to wrap all of the information up into one place. And nobody has looked at this asset in today’s price environment.”
Bullabulling was last mined in 1998 by Resolute Mining, which placed it on care and maintenance at a time when the gold price was $500/oz.
Presently, an ounce of gold is around $4,250.
Mr McFadyen also provided shareholders with an update regarding the company’s present re-compliance and said he was hopeful the junior would resume trading soon on the ASX.
“The key reason for it {re-compliance} is we’re obviously changing the scale of this company significantly,” he said.
“We’re a $30 million company, buying a $166.5 million asset, so under the
ASX rules, we do need to re-comply with that.
“This allows us to disclose all of the information that investors require to make a decision to inform them about the shareholder vote.
“From our timeline perspective, we’re looking at late-March or early-April until we’re trading again, but we do look forward to trading again very soon.”
Mr McFadyen said Minerals 260 would also update the market regarding its Moora and Aston projects in due course.
“Look, we did just finish a round of exploration at Moora in December,” he said. “So the update for that will come out in the January quarterly.
“And with a big asset like this, all of the other projects will be re-assessed – but they are still great projects in their own right.”
