Aurumin gives nod to Brightstar merger for Sandstone gold consolidation
Both companies announced today that they have entered a scheme implementation deed, under which Aurumin will propose a scheme of arrangement between the company and its shareholders.
The scheme will pave the way for a scrip-based deal enabling Brightstar to acquire Aurumin via one Brightstar share for every four Aurumin shares.
The scheme consideration implies a value of 12 cents per Aurumin share, based on a 48c price per Brightstar share. The 48c share price is based on binding commitments Brightstar has received to raise $50 million before costs from a placement priced at the 48c level to fast-track the company's growth plans across its impressive gold portfolio.
Notably, the placement is not conditional on completion of the share scheme.
A value of 12c per Aurumin share represents a 21 per cent premium to its 9.9c closing price last Friday, July 17, and a 20 per cent premium to the company's share price of 10c on June 27, when the initial joint announcement revealed merger discussions between the two firms.
Additionally, the 12c share price is a 27 per cent jump above Aurumin's 30-day volume-weighted average price of 9.4c.
The scheme consideration also implies an equity value of $60 million for Aurumin and an enterprise value of $62 per gold ounce, based on the company's mineral resource of 950,000 ounces grading 1.5 grams per tonne (g/t) gold.
Aurumin's board hold 16 per cent of Aurumin's issued shares and has unanimously recommended the share scheme. All the company directors intend to vote in favour of the scheme, in the absence of a superior proposal and subject to an independent expert concluding the share scheme is in the best interest of Aurumin shareholders.
Brightstar Resources managing director Alex Rovira said:
'This is a compelling transaction for all stakeholders, and we believe that combining Aurumin and Brightstar represents a unique opportunity to build a Western Australian gold business of genuine scale with demonstrable upside that also de-risks future development activities and operations at Sandstone.'
Bringing the two companies' adjacent tenement portfolios under one roof would eliminate the ownership fragmentation that has long frustrated development in the Sandstone district.
The result would provide for a single gold development opportunity on granted mining leases with scale, grade and location, enabling the project to fast-track into production.
Brightstar would deliver gold-rich assets such as its Lord Nelson and Lord Henry deposits, and the Vanguard and Indomitable Camps, to the merger. The company's global resource sits within 13 deposits and totals 1.553 million ounces running at 1.5g/t gold.
Aurumin would contribute its Two Mile Hill underground resource and its 570,000 ounces, in addition to a suite of shallow open pit opportunities, including Shillington and Plum Pudding.
Aurumin also holds an important asset with its dormant 500,000 tonne-per-annum carbon-in-leach plant. While it hasn't been fired up for a few years, the facility is fully licensed and has permitted tailings storage, a water bore field and an on-site camp.
Even better, it sits on freehold land, 12km from the Sandstone township.
Notably, nearly all the resources from both companies sit on granted mining leases, providing a solid foundation for mine planning and permitting.
If the scheme proceeds to completion, Brightstar will move up the ranks of WA's current crop of developers and producers. It will hold an impressive, combined mineral resource of 2.4M ounces of gold at 1.5g/t from the combined Sandstone assets and a hefty mineral resource of 3.9M gold ounces across its Sandstone, Laverton and Menzies projects.
Upon receiving the placement proceeds of $50 million, Brightstar will be sitting on a $63 million mountain of cash. It will control a strategic 1600 square kilometre patch of ground in Sandstone, enabling the company to establish a district-scale open pit development opportunity. It plans to unveil a preliminary feasibility study on the consolidated asset base in the first half of next year.
After completion of the scheme, Brightstar shareholders will comprise about 82 per cent of the merged entity, with Aurumin shareholders accounting for the remaining 18 per cent.
Aurumin shareholders are expected to benefit from more exposure to Brightstar's WA gold projects, share ownership in a larger WA-based gold company that may offer enhanced trading liquidity and a possible positive market re-rating, along with a potentially shorter timeframe to develop its Central Sandstone project.
The Sandstone region has always been considered highly prospective for a major gold mining operation - this time that expectation might be realised.
Is your ASX-listed company doing something interesting? Contact:
matt.birney@wanews.com.au
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
AU Financial Review
8 hours ago
- AU Financial Review
Too good to be true: Sydney exec testifies in $253m Perth fraud trial
The investors who entrusted him with more than a quarter of a billion dollars say Chris Marco held himself out to be an experienced businessman – a leprechaun who could take them to the pot of gold at the end of the rainbow. Only there was no pot of gold, prosecutor Steven Whybrow, SC, told the Western Australian Supreme Court, just a flimsy scheme kept afloat by the flow of funds being used to pay off old investors that was taking on water fast.
West Australian
8 hours ago
- West Australian
New market forces
It's no secret that Australia's marketing leaders are facing more challenges and opportunities than ever before. But is the environment for marketers in WA any different? In the absence of State-specific intelligence, I recently went out to uncover the themes that Western Australian chief marketing officers (CMOs) were facing. Not surprisingly, change was top of the agenda. But having collated the findings into a report called 'The evolving role of the CMO – The Western Australian Perspective' – the scale and pace of that change is all the more apparent. It appears that two CMO typologies have emerged– those who have influence across and throughout their organisation, and those whose influence stays within their marketing remit. If diversity in responsibility was consistent across the respondents, so too was the increasing need to solve more diverse problems. As one CMO I spoke to said: 'The role of the CMO these days is quite hard to articulate. Every role I have had, I've taken on things you would argue wouldn't be part of a traditional CMO function'. Any recruiter writing a job description for a CMO in WA would have their work cut out. Faced with so much change, we also found that WA CMOs must be comfortable in the uncomfortable and able to shift focus if there's strategic merit. As one CMO put it: 'Sometimes you just need to run towards the fire and hope there aren't too many fires at once'. Interestingly though, CMOs acknowledged the importance of the rest of the business in adopting a similar mindset, as one said: 'There's time when we just need to pivot and say 'right, let's go'. So, we must be agile, the Board has to be agile, and our processes must facilitate that agility'. More broadly, the 'brain drain' of talent leaving WA is being acutely felt – and whilst post-Covid there has been 'brain gain' across the State, the marketing industry still has bigger brands with greater opportunity enticing the best talent to head East or overseas. And, in terms of the contribution that marketing can make to an organisation and its future, the CMOs I spoke to were able to speak with confidence about demonstrating impact, but less confidently about the organisation's belief in marketing as a function for delivering growth. Finally, it was little surprise that the need to frequently navigate complex stakeholders and organisational bureaucracy was also raised. Just how much of the role is dedicated to this need was difficult for most to quantify, but one CMO claimed it took around 60% of their time. And why is all of this important? It's fair to say that the pace in which change affects practitioners in our State will be variable. But make no mistake, if you are a marketer or CMO in WA, and change isn't happening around you just yet, it won't be long before it happens to you. Therefore, it's critical that the CMOs of present and future remain adaptable, and open to embracing new thinking. If we cannot, then marketing's role as a value driver will be brought into question – both in our own State and beyond. To request your copy of the full report, email
West Australian
8 hours ago
- West Australian
Holding on to vision when west meets east
As marketers, we are always searching for the elusive 'perfect' articulation of brand purpose. When you get the magic right—when consumers, shoppers, retailers and employees all believe and experience why the brand exists—it builds a strong emotional connection. In turn, this fosters deep loyalty. But if you get the purpose wrong, or chop and change it with every new brand manager, the brand can easily be dismissed as inauthentic. In my experience, the history of a brand forges the path to a unique and differentiated purpose. Who founded the brand? What's the origin story? What hardships were overcome to grow it? Who were the early loyal customers? These stories often pave the way to an authentic purpose that sets the brand up for long-term success. Gage Roads turns 20 this year, and while Single Fin and Side Track are homegrown Western Australian favourites, the rise of Gage Roads on the east coast is just starting to take off. The story of Gage Roads began with two brothers and a mate, a $25,000 credit card, and a desire to create beers that paired perfectly with their West Aussie lifestyle. Beach days, surfing with mates and trips to Rotto were staples of that life—and they helped define the brand's purpose, as well as its distinct personality. With 85% of Australians living within 50km of the coast, Gage Roads has been able to connect with people across the country. As more consumers seek Aussie authenticity and connection, we're seeing Gage Roads grow rapidly in the East—driven by our 'Made for Yewwwww' campaign, sponsorship of grassroots surfing, and commitment to creating opportunities for great coastal experiences with mates, just like our founders envisioned. Brand purpose isn't just words on a page. It's a guide that helps define what is right and wrong for the brand. It drives differentiation, loyalty and engagement - with consumers and employees alike—and, ultimately, it creates value.
