Gold explorer Star Minerals is on track to list on the ASX next month, having received a $2.5 million investment from Magnolia Capital.
Gold explorer Star Minerals is on track to list on the ASX next month, having received a $2.5 million investment from Sydney-based Magnolia Capital.
Star says it now has $5 million in pledges, the maximum under its initial public offering.
It expects the capital raising will be completed by September 24 and that the company will list on the ASX in the first week of October.
Star will issue 15 million shares through its IPO at 20 cents each, along with a free-attaching option (exercisable at 30 cents) for every two shares subscribed for.
The Perth-based company says it will use the proceeds to complete its acquisition of the ‘mine-ready’ Tumblegum South project from Bryah Resources.
Star has agreed to pay $500,000 in cash for the asset, as well as issue 9 million shares and 7 million performance rights.
Bryah will retain a 21 per cent shareholding in Star.
Its chief executive, Greg Almond, said a drilling campaign at Tumblegum South was expected to start before Christmas.
“We are delighted to be taking this mine-ready deposit to the next stage and looking forward to ringing the bell in early October,” he said in a statement today.
“Our point of difference to other gold IPOs is we have an actual gold resource and a pathway to gold production.
“The market has recognised that, and it has been an important factor in the successful fund raising – investors are impressed that we are bringing a mine-ready asset to market.
“The outlook for the gold price is expected to remain high, and this IPO has capitalised on that trend.”
Mr Almond said the proceeds would specifically be applied to drilling, environmental and engineering work at Tumblegum South, which has an inferred resource of 600,000 tonnes at 2.2 grams per tonne of gold.
A mining lease has already been granted.
“The intention is to mine the pit using a contract fleet, at an appropriate rate, and sell ore to a processing partner,” Mr Almond said.
“The initial operation will be of low capital intensity, and that process will provide a cash influx to fund our further activities.”
Star's other project, West Bryah, is a 350 square kilometre tenement package prospective for gold, copper, and other base metals.