IGO to record impairment against nickel assets in strategy shift
IGO has been undertaking a strategic review in an attempt to revaluate its resources.
Australian gold explorer Star Minerals, a spinoff of Bryah Resources (ASX: BYH), said on Tuesday it had secured A$5 million ($3.6m) ahead of its listing on the local exchange in October after Sydney-based Magnolia Capital Group pocketed half of the total raised.
Star Minerals will use the funds to acquire its parent company’s Tumblegum South holding for A$500,000 cash, 9 million shares and 7 million performance rights.
“Our point of difference to other gold IPOs is that we have an actual gold resource and a pathway to gold production. The market has recognized that and it has been an important factor in the successful fund raising,” Star Minerals chief executive officer, Greg Almond, said in the statement.
“The outlook for gold continues to strengthen, and we believe Star Minerals has a sound growth strategy and significant opportunity in an under-explored area known for its gold deposits,” Magnolia Capital Group chief investment officer Mitchell Atkins noted.
The explorer, a spinoff of Bryah Resources, will use the funds to acquire its parent company’s Tumblegum South asset in Western Australia
Tumblegum South is located about 40km south of the town of Meekatharra and along strike from the Tumblegum pit, which was mined by Dominion Mining during 1987–1992. The project was explored with a total of 49 holes for 5,640 meters of drilling between 2013 to 2019 and has a mineral (inferred) resource estimate that totals 600kt, at a grade of 2.2 g/t Au.
The junior also plans to grab the West Byrah Project from seven vendors for two million shares and 0.75% royalty on future production.
Star will issue 15 million shares through the IPO at 20 Australian cents each, along with free-attaching option for every two shares subscribed for.
Bryah Resources, which will retain a 21% stake in Star Minerals, is the latest explorer to take advantage of hot capital markets to spin-out its gold assets into a separate company.
Canada’s KORE Mining (TSX-V: KORE) group spun out its gold assets into Karus Gold in January, while Encounter Resources announced in July plans to merge its subsidiary, Hamelin Gold, into a separately listed entity, holding its West Tanami gold assets.
Another Aussie minor, Chalice Mining, flagged in July the possible demerger of its Australian gold assets into a standalone, listed gold-focused exploration company.
