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Highlights
- Native Mineral Resources acquires key gold assets in Queensland for $18.9 million.
- Deal includes the Far Fanning and Black Jack gold projects, nearing production.
- Company explores various fundraising options to support acquisition and exploration.
Native Mineral Resources (ASX:NMR) has emerged from a trading halt to announce a major step in its growth strategy—a transformative acquisition of significant gold assets in northern Queensland. The company has entered a binding agreement with managed fund Collins St Convertible Notes to acquire advanced gold projects, including the Far Fanning and Black Jack deposits. The total consideration for these assets amounts to $18.9 million.
This acquisition marks a significant shift for Native Mineral Resources as it positions itself for a transition from junior exploration to a potential gold producer. The agreement is part of Collins St’s deed of company arrangement proposal following the administration of Blackjack Milling and Fortified Gold. Native Mineral Resources has already made an upfront payment of $500,000, with additional instalments of $1 million scheduled for later dates in 2024 and 2025.
The transaction is structured to minimize dilution for shareholders. Instead of an immediate large payment, the $18.9 million cost is spread out over a 33-month period. Moreover, the deal includes a 2% perpetual royalty on gold production, ensuring that the financial burden remains manageable for the company. This structure also enables Native Mineral Resources to conserve cash flow while advancing the newly acquired projects.
To fund the acquisition and its associated exploration plans, Native Mineral Resources is evaluating a number of fundraising options. The company aims to raise up to $14 million, which will cover the acquisition costs and provide working capital for exploration activities. A portion of these funds, estimated at $2 million, will be directed towards further exploration of the Far Fanning and Black Jack deposits. The company also plans to use the funds for ongoing development of other projects within its portfolio.
The fast-tracked development of the Far Fanning and Black Jack deposits is expected to significantly enhance Native Mineral Resources’ asset base. The company intends to focus on resource definition, infill drilling, and feasibility studies to increase the resource confidence in these projects. This strategic push towards advancing its near-production assets could position Native Mineral Resources as a prominent player in the Queensland gold sector.
With the addition of these high-potential gold projects, Native Mineral Resources now boasts an expanded portfolio, which also includes the Palmerville and Maneater Hill projects. Managing director Blake Cannavo emphasized that this acquisition sets the company on a clear path towards production, aiming to deliver substantial value for shareholders in the coming years.
