Native Mineral Resources to acquire key Queensland gold assets in $18.9m deal

Native Mineral Resources (ASX: NMR) has come out of an extended trading halt to announce what it describes as a “transformational” acquisition.

The company is outlaying $18.9 million under a binding agreement with managed fund Collins St Convertible Notes to acquire a suite of advanced, near-production gold projects in northern Queensland including the prospective Far Fanning and Black Jack deposits.

The agreement is part of Collins St’s deed of company arrangement proposal for Blackjack Milling and Fortified Gold, which were recently placed in administration.

Non-dilutive structure

The $18.9m consideration for the assets is to be structured over 33 months with a 2% perpetual royalty on gold production, ensuring a manageable and non-dilutive cash flow profile.

Native Mineral Resources has already paid an upfront deposit of $500,000 to Collins St pursuant to the agreement.

Further instalments of $1m are to be paid on 20 December 2024, 20 March 2025 and 20 June 2025.

Fundraising plans

Native Mineral Resources is evaluating a number of fundraising options and intends to raise sufficient capital to ensure it is able to meet its obligations under the agreement and for working capital purposes, including up to $2m in exploration costs on the Far Fanning and Black Jack projects as well as the other tenements included in the asset package.

The raise is targeting up to $14m, with any excess funds allocated to the early repayment of the remaining debt owed to Collins St.

The company plans to advance exploration and undertake resource definition and infill drilling at Far Fanning to increase resource confidence, followed by an updated mineral resource estimate and feasibility studies.

Fast-tracked development

Managing director Blake Cannavo said these efforts could fast-track the company’s transition.

“By securing two near-mine, advanced gold projects with robust resource potential, we are positioning ourselves to move rapidly towards production,” Mr Cannavo said.

“This deal propels us from a junior explorer to a potential gold producer in under two years, significantly enhancing value for our shareholders.”

The new assets add to the company’s portfolio of precious metal and base metal properties including the Palmerville and Maneater Hill projects in Queensland.