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Brightstar Resources and Aurumin in merger talks to consolidate Central Sandstone gold tenements

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By Imelda Cotton - 
Brightstar Resources ASX BTR Aurumin AUN merger talks
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Brightstar Resources (ASX: BTR) and Aurumin (ASX: AUN) are in talks regarding a proposed merger to consolidate their respective tenement holdings within the Central Sandstone region of Western Australia in an effort to de-risk and accelerate development of the emerging Sandstone gold project.

The merger would provide greater certainty for the development of new infrastructure in the region, unlocking exploration synergies and creating significant value for the shareholders of both companies.

Joining all tenements would give Sandstone a pro forma total mineral resource estimate of 2.4 million ounces grading 1.5 grams per tonne gold.

Scrip consideration

Under the terms of the proposal, Brightstar would acquire Aurumin for a scrip consideration equating to one new Brightstar share for every 4.6 Aurumin shares.

Based on Brightstar’s 20-day volume-weighted average price (VWAP) of $0.54 per share, the transaction implies a value of $0.117 per Aurumin share.

This represents a 17% premium to Aurumin’s last closing price and a 26% premium to its 20-day VWAP of $0.093 per share.

The companies are currently progressing mutual due diligence investigations and confirmed that shareholders do not need to take any action at this time.

Royalty agreement

Brightstar recently completed a 2% gross revenue royalty agreement with Red Hill Minerals (ASX: RHI) over the 1.5Moz Sandstone Hub.

It followed the company’s reporting of high-grade shallow infill and extensional assays from the Musketeer deposit within the Indomitable Camp, as part of a greater 80,000-metre campaign at Sandstone.

Best results were 10m at 43.8g/t gold from 36m including 1m at 356g/t from 37m and 9m at 2.99g/t gold from 75m including 4m at 5.89g/t from 75m, with panning of reverse circulation drill spoil also recovering numerous gold nuggets and coarse visible gold.

Brightstar confirmed that Sandstone Hub mineralisation remains open along strike and at depth, providing opportunity for future resource growth and targeted deeper drilling.