Brightstar Resources (ASX:BTR) and Aurumin (ASX:AUN) are considering a merger to consolidate the respective tenement holdings in the Central Sandstone region of Western Australia.
Under the non-binding indicative terms for a scheme of arrangement, Brightstar would acquire Aurumin for scrip consideration in which shareholders will receive one new Brightstar share for every 4.6 Aurumin shares held.
Based on a 20-day volume weighted average price of Brightstar, $0.54 per share, this would imply a volume of $0.117 per Aurumin share.
Brightstar, which has a market capitalisation of $231.56 million, says both companies have engaged in several discussions and are currently progressing mutual due diligence investigations.
Both companies recognise the combination represents a “unique” opportunity to de-risk and accelerate the development of the emerging Sandstone Gold Project in Western Australia.
A consolidated greater Sandstone Project would have a pro-forma resource estimate of 2.4 million ounces @ 1.5 grams per tonne gold located on granted mining leases.
In parallel, the companies believe the merger provides greater certainty for the development of new infrastructure in the region, as well as unlock exploration synergies.
Aurumin is a Western Australian explorer and developer primarily focused on gold. The company’s main projects are the Sandstone Operations, the Mt Dimer Project, and the Mt Palmer Project — all of which contain historically producing gold mines.
Brightstar Resources is a Perth-based gold explorer and developer with key operations in the Laverton and Menzies Goldfields of Western Australia.
Brightstar will also be attending the Noosa Mining Investor Conference, held between 23-25 July, at the Peppers Noosa Resort. Mining.com.au is an official media partner of this year’s conference.
Write to Aaliyah Rogan at Mining.com.au
Images: Aurumin
