Native Minerals (ASX:NMR) has signed a binding agreement with Collins St Convertible Notes to acquire two near-mine gold projects, dubbed Far Fanning and Black Jack, in Queensland.
Collins St is a fund targeting quarterly income payments underpinned by debt like downside risk and equity like upside potential.
The Far Fanning Project comprises five mining leases covering 2.6km2 in northern Queensland. The project contains a resource estimated, completed in 2021, totalling 2.3 million tonnes at 1.84 grams per tonne gold for 138,000 ounces of gold.
Meanwhile, the Black Jack Project is part of the Charters Towers Project, which includes 12 granted mining leases. The prospect covers three shallow oxide pits that sit above the historical Black Jack and John Bull underground workings that were worked intermittently from 1875 to 1889.
The consideration for both projects totals $18.9 million, which will be paid over 33 months. The first payment of $1 million will be paid on 20 December 2024.
Managing Director Blake Cannavo says the deal propels the company from a junior explorer to a potential gold producer in less than two years.
“This acquisition is a transformative milestone for Native Minerals,” Cannavo says.
“By securing two near-mine, advanced gold projects with robust resource potential, we are positioning ourselves to move rapidly towards production.”
Native Minerals is exploring several fundraising pathways and is planning to conduct a capital raising next week, which will include a placement and entitlement offer to eligible shareholders.
Under the placement and entitlement offer, the issue price is expected to be between $0.03 and $0.07 per share, raising up to $14 million.
The funds are expected to go towards an initial $3 million payment to Collins St, up to $2 million in exploration activities across the newly acquired projects, up to $3 million in exploration activities on the company’s existing tenements, and paying specific fees and general working capital.
Subject to raising more than $14 million, excess funds could be allocated to early repayments of the remaining debt owing to Collins St.
The terms of the entitlement offer will be finalised by no later than 13 November 2024, with the offer anticipated to be open for a four-week period.
Once completed, Native Minerals intends to advance exploration work and conduct resource definition and infill drilling at Far Fanning to increase confidence. Upon completion, the company intends to update the resource estimate at the project and undertake feasibility studies.
The company says these efforts could support fast-tracking Native Minerals’ transition from explorer to producer.
At Far Fanning, Native Minerals reports early-stage work has confirmed the presence of gold-bearing mineralisation. The company says while this does not confirm the expectations of an economic deposit, it does highlight the presence of high-grade veining at the project.
Meanwhile, at Black Jack, a processing plant and associated infrastructure sits across 5.2km2 of granted mining leases and freehold land.
The plant is currently permitted as a 340,000 tonnes per year operation with a primary and secondary crushing system, 600 kilowatt ball mill, gravity circuit, carbon-in-lead arrangement, elution system, and gold room.
Native Minerals is primarily focused on discovering copper and gold with its assets in Queensland and Western Australia.
Write to Aaliyah Rogan at Mining.com.au
Images: Native Minerals
