The BML NewCo project holds a 276,000-ounce gold resource.

RDG plans $15m gold buy

Monday, 10 September, 2018 - 13:51

Resource Development Group has announced plans to acquire a 30 per cent stake in a gold project from Bullseye Mining, which is currently the subject of a takeover offer and board spill.

Under the deal, RDG will take a 30 per cent interest in a newly-created entity, BML NewCo, for a consideration of $15 million, to be paid off in instalments.

BML NewCo will own 36 square kilometres of mining leases that are currently part of Bullseye’s North Laverton gold project.

The BML NewCo project holds a 276,000-ounce gold resource.

RDG acquired an 80 per cent stake in mining services company Mineral Solutions in July.

“The proposed transaction with BML is therefore a natural extension for RDG as it will result in providing their expertise and likely access to other such future opportunities, which are in its traditional contracting space, and significantly also provides RDG with a direct equity interest of 30 per cent in the BML NewCo project,” the company said in a statement to the ASX.

The transaction is subject to a number of conditions, including shareholder and board approval.

In February, gold junior Red 5 announced a hostile $4 million takeover bid for Bullseye.

The unlisted company has since received notice of a requisition to remove directors Peter J Burns, Dariena Mullan and Peter G Burns, along with the appointment of Brett Clark and Yiyang Qiu as replacement directors.

Bullseye has also received a proposal for a fully underwritten placement of 15 million ($26.7 million) worth of convertible notes.

Desmond Mullan, who is the father of Ms Mullan, will underwrite the offer.

Mr Mullan has also proposed a $100 million prepayment gold deed to the company.

RDG said its transaction was also subject to approval from Mr Mullan following approval and completion of the two transactions.

Shares in RDG were up 33 per cent at 2.4 cents each at 2.20pm AEDT.