Barton Gold builds war chest to accelerate SA gold projects

Barton Gold (ASX: BGD) shareholders will from Tuesday be able to join institutional investors in boosting the company’s bank balance as it gets ready to push forward on its two gold projects in South Australia.

Barton is looking comfortable: it estimates its cash balance at the end of the financial year this coming Friday will be well over the $10 million mark.

Then it will add on proceeds from the cleanup of the mothballed Central Gawler mill, where the first of three batches of materials from the cleaning of the mill and its machinery yielded gold worth about $1.1 million.

The second batch of materials was dispatched for treatment earlier this month.

Now a shareholder purchase plan is aiming to raise a further $1 million with shares offered at $0.25 each, the same price that was set for the $3.5 million placement.

Funding for Stage 1 resources definition

The placement and SPP proceeds will be used to accelerate Stage 1 resources definition, along with further mineral resources updates, at the Tarcoola and Tunkillia projects.

Those will be complete by the end of this year.

The Tarcoola project lies near the junction of the Perth-Sydney and Darwin railway lines and, 70km to the south is the unmined Tunkillia project which has a JORC resource in place.

In addition, Barton had acquired the region’s only gold ore processing mill, the Central Gawler plant (as well as the mothballed Challenger mine which is not deemed a priority).

Tarcoola until 1956 was South Australia’s major hard rock gold mine, producing 77,000oz at an average 37.5g/t

Mining resumed at Tarcoola in 2016 when the former WPG Resources worked the open pit and hauled ore to the Central Gawler mill, the operation lasting until 2018.

Institutional backing

The placement of $3.5 million was backed by several existing and new institutional investors, including Ixios Asset Management, Argonaut Funds Management, Mercer Street Capital Partners and Collins Street Asset Management.

The SPP opens on Tuesday, June 27, and close on July 14.

Managing director Alex Scanlon said the placement involved only a 7.35% dilution for existing shareholders.

“The placement is a strong validation of Barton’s value proposition and performance,” he added.

“We now have a reinforced cash position with a strong focus on extending our record of cost-efficient exploration and non-dilutive cash generation.”