Star Minerals (ASX:SMS) Managing Director Ashley Jones says the company is focused on establishing a “safe and efficient” mine at the Tumblegum South Gold Project in Western Australia.
The company secured a gold toll treatment agreement with Catalyst Metals (ASX:CYL) yesterday (18 February), to process 250,000 tonnes of mill feed from the project at the Plutonic Mill.
This agreement is adjoined with Catalyst’s strategic placement in Star at completion for $1 million at $0.062 per share, along with the acquisition of Star’s West Bryah Basin Copper-Gold Project for $2.75 million.
Catalyst will acquire the asset for $1 million cash and 230,534 shares.
Speaking to Mining.com.au, Jones explains that the next six months is a growth period for Star Minerals, with company-wide focus on Tumblegum South to achieve a first gold pour at Plutonic.
“Cash coming into a company is a great catalyst for growth,” Jones tells this news service.
“With funds from the sale of West Bryah to Catalyst and incoming funds from their investment, we will have the money and size to look for larger near term assets that we might be able to bring into production.
“I think the periods during mining mobilisation to site and the first gold pours will see growth in the company, showing that we have delivered on what we undertook to the market.
“This is Star Minerals’ progress from explorer to producer.”
As a part of the toll treatment agreement, Catalyst will receive last right of refusal on the sale of tenements or rights at Tumblegum South and 11.13 million options, exercisable at $0.081 and to expire in five years.
“The three agreements with Catalyst are vitally important to Star Minerals. Firstly, the toll treatment agreement lets Star Minerals process its Tumblegum South material through Catalyst’s Plutonic plant which is about 200km away,” Jones adds.
“The capital placement strengthens the relationship and ensures the processing is mutually beneficial to both parties.
“Finally, the purchase of the West Bryah tenements enables Catalyst to explore a large package of the Bryah Basin and enables Star Minerals, with more cash resources, to look for further near-term production assets alongside its major shareholder Bain Global and MEGA Resources.”
In the near future, the company will focus on addressing final government clearances, with a focus on receiving the native vegetation clearance permit. Jones says the company will also conduct drilling at the western exploration target.
As reported by Mining.com.au, Catalyst also entered an agreement with Albright Metals (ASX:ABR) to acquire a large portion of its Bryah Basin tenements in Western Australia for a total consideration of $1.8 million.
Catalyst will pay $1 million in cash, along with $800,000 in shares for the tenements, excluding manganese mineral rights. The issuance of shares will result in 105,387 shares based on the five-day volume weighted average price preceding the agreement execution.
Write to Maddison Elliott at Mining.com.au
Images: Star Minerals
