Brightstar Resources (ASX:BTR) and Aurumin (ASX:AUN) are exploring a potential merger aimed at consolidating their tenement holdings within the Central Sandstone region of Western Australia. The companies have engaged in initial discussions and are progressing with mutual due diligence investigations to assess the merits of the combination. Brightstar Resources is a Perth-based gold explorer and developer with operations in the Laverton and Menzies Goldfields of Western Australia.
Under the non-binding indicative terms of the proposed scheme of arrangement, Brightstar would acquire Aurumin through a scrip consideration. Aurumin shareholders would receive one new Brightstar share for every 4.6 Aurumin shares they hold. Based on Brightstar’s 20-day volume weighted average price of $0.54 per share, this implies a value of $0.117 per Aurumin share. Aurumin is a Western Australian explorer and developer focused primarily on gold, with key projects including the Sandstone Operations, Mt Dimer Project, and Mt Palmer Project.
Both companies believe the merger presents a “unique” opportunity to de-risk and accelerate the development of the emerging Sandstone Gold Project. The combined entity, operating as a consolidated greater Sandstone Project, would possess a pro-forma resource estimate of 2.4 million ounces of gold at 1.5 grams per tonne, located on granted mining leases. Brightstar, with a market capitalisation of $231.56 million, anticipates the merger would provide greater certainty for infrastructure development in the region.
The companies also expect the merger to unlock significant exploration synergies.
