Lachlan Star (ASX:LSA) has struck a deal with DevEx Resources (ASX:DEV) to acquire a ‘highly prospective’ portfolio of copper-gold exploration tenements in the Lachlan Fold Belt in New South Wales, Australia.
Lachlan Star, which has an $11.87 million market capitalisation, has signed a share sale agreement for the conditional acquisition of TRK Resources, a wholly owned subsidiary of DevEx, which holds the 11 exploration tenements covering 1,956km-square.
Under the terms of the agreement, Lachlan Star will issue about 756.73 million LSA shares to DevEx at $0.01 per share, valuing the deal at roughly $7.5 million. Further to the share issue, Lachlan Star will grant DevEx a 2% net smelter royalty on any future production from the tenements.
The transaction remains subject to shareholder approval, which will be sought at a meeting slated for late September 2023.
Commenting on the acquisition, Lachlan Star Chairman Gary Steinepreis says: “We are delighted to have reached agreement with DevEx to acquire this extensive and highly strategic New South Wales portfolio, as part of a scrip-based transaction that will see DevEx emerge as our major shareholder, post-completion.
“The NSW projects have delivered exciting early-stage results, with a significant amount of drilling already completed”
The New South Wales portfolio includes the Junee Project, located in Australia’s copper-gold porphyry heartland, and the North Cobar Project, located along strike from the world-class Cobar mining centre.
The NSW projects have delivered exciting early-stage results, with a significant amount of drilling already completed. We believe these assets have outstanding potential to yield a world-class discovery, and we are looking forward to getting on the ground later this year to start testing the targets identified through our due diligence process.”
Following completion, DevEx will hold 36.46% of the ordinary share capital of Lachlan Star and will appoint 2 directors to the company’s board.
The company notes these new exploration tenements represent a ‘great’ opportunity for the discovery of ‘significant’ gold and copper-gold mineralisation.
On top of the DevEx deal, Lachlan Star has announced its intention to undertake a 1-for-10 consolidation of its capital.
Lachlan Star is an ASX-listed exploration company focused on its projects located across Western Australia and Queensland. As of 30 June 2023, the company had $3.367 million cash at hand and no debt, according to its latest quarterly report published on 31 July 2023.
Write to Aaliyah Rogan at Mining.com.au
Images: Lachlan Star Ltd
