Cashed-up gold miner Northern Star Resources has taken a strategic stake in Venturex Resources, but says it is still on the lookout for a major corporate or project acquisition.
Venturex announced an $11 million capital raising today, with Northern Star Resources emerging as its major shareholder after signing up for $6.5 million of shares, via a placement priced at 4 cents each.
Venturex also launched a 1 for 10 share issue for eligible shareholders, to raise $4.5 million at 3.6 cents per share.
Broking houses Argonaut and Steinepreis Paganin acted as advisers to Venturex.
Following completion of the placement, Northern Star will hold a 13 per cent stake in Venturex.
Northern Star will also underwrite the share issue, giving it the opportunity to up its stake to 21 per cent for a total investment of $11 million.
Also, Northern Star's general manager – finance and commercial, Ray Parry, will join Venturex's board as non-executive director.
Northern Star Managing Director Bill Beament said the company remained on the lookout for a major acquisition using its debt-free balance sheet, strong cash-flow from its Paulsens gold mine in the Pilbara and substantial cash on hand.
“While we continue the search for a suitable major acquisition, we believe this demanding sharemarket environment will generate more opportunities for Northern Star to apply its financial and technical strengths to under-exploited projects,” he said.
Mr Beament said the company was pleased to become a cornerstone investor in Venturex after having monitored its performance for the past 12 months.
"Their project meets our criteria, in part because it would enjoy a high head-grade, high cash margins and can be bought into production in a reasonable time," he said.
The companies also entered a non-binding agreement to explore the potential joint venture development of Venturex's Pilbara copper-zinc project, located near Whim Creek.
Venturex said the funding from the raise would give it general working capital for the next 12 months, as it works towards project development decisions for its assets in the Pilbara and Brazil.
Managing director Michael Mulroney said Venturex would focus of finalising a feasibility study for the Pilbara project, and increase resource development and exploration programs on targets in the Pilbara, and a maiden drilling program at its Brazilian tenements.
“We welcome the investment in Venturex's future by an experienced and successful mining company such as Northern Star,” Mr Mulroney said.
“We believe they can make a significant contribution to our ambition to develop a substantial new high grade copper-zinc operation in the Pilbara region.”
At 10:45AM, Venturex stocks had climbed 15.8 per cent, trading at 4.4 cents, while Northern Star shares had dipped by 3 per cent, at 64.5 cents.
