Black Cat Syndicate (ASX:BC8) has mapped a path towards becoming a dominant player in 3 prolific gold districts on the back securing a $60 million funding package.
The $76.68 million market capitalisation company says it has entered into agreements to secure the funding, which will help drive the restart of its Paulsens Gold Operation.
In turn, Black Cat hopes internal cashflows from Paulsens will then help fund the restart of the Coyote Gold Operation, as well as to develop its Kal East Project, both located in Western Australia.
Prior to completion of the placement, Black Cat will focus on Paulsens, with works including identifying optimisation opportunities for the process plant, including cost and risk reductions, recovery improvements, and capacity utilisation increases.
Other works include reverse circulation (RC) drilling along the 2.5km Belvedere trend, the 1km Pantera prospect, and the near-mine Apollo extension, modelling of the recent drilling to upgrade the Paulsens resource, and updating the restart study to maximise cashflow.
The funds will be provided in equal amounts by Fuyang Mingjin New Energy Development and Southeast Mingqing Supply Chain through to a total of $45 million.
These placements will involve the issue of 200 million fully paid ordinary shares at $0.225 per share, which represents the same price as a recent $8.3 million placement. Once complete, each of the parties will become substantial shareholders at 19.9% each.
The remaining $15 million is expected to be provided by Mingjin on competitive terms, with payments of principal and interest blended with the expected production start-up.
Speaking on the activities at Paulsens, Black Cat Syndicate Managing Director Gareth Solly says: “At a time of high gold prices, predevelopment projects with low initial capital, low operating costs, strong growth potential and largely installed infrastructure are few and far between. Both Mingjin and Southeast Mingqing share our vision and we look forward to both companies becoming substantial shareholders in Black Cat.
At Black Cat, the past year has largely been about the restart of Paulsens. Our strategy going forward is to use internal cashflows from Paulsens to fund developments at Coyote and Kal East. Our robust studies at Coyote and Kal East emphasise the size of the prize. This strategy requires minimal shareholder funding to build our vision of being a 150,000oz pa (per annum) producer. At even a modest enterprise value per production ounce, Black Cat has the potential to substantially rerate.
With an attractive funding solution to restart Paulsens, our focus remains on the November 2023 Restart Study which is targeting increased production, improved recoveries, lower upfront capital cost and stronger cashflow.
“With an attractive funding solution to restart Paulsens, our focus remains on the November 2023 Restart Study which is targeting increased production, improved recoveries, lower upfront capital cost and stronger cashflow“
The short refurbishment program will commence in early 2024 and should see first gold in the September 2024 quarter. Paulsens will be just the first of Black Cat’s operations and we remain committed to become a mid-tier, multi-operation producer. Subject to completion, this funding package means that investors can focus on the quality of Black Cat’s projects, our strategy and rerate potential as operations ramp up.”
Black Cat Syndicate is a Western Australian gold explorer focused on becoming a multi-operation gold producer at its 3 wholly owned operations.
The company’s Paulsens project is located about 180km west of Paraburdoo in Western Australia and consists of an underground mine, a 450,000 tonne per annum (tpa) processing facility, a 128-person camp, as well as numerous open pits and other related infrastructure.
Meanwhile, Coyote is located in northern Australia, about 20km on the Western Australia side of the Western Australia/Northern Territory border, while its Kal East project is situated east of the township of Kalgoorlie.
Black Cat Syndicate had $4.7 million cash at hand as of 30 June 2023, according to its latest quarterly report.
Write to Adam Drought at Mining.com.au
Images: Black Cat Syndicate