Besra IPO rises with +3Moz gold project under its wing

Like a phoenix rising, the upcoming listing of Besra Gold will represent something of a rebirth – and a +3.3-million-ounce gold proposition for investors.

Besra Gold Inc once was a TSX/ASX listed gold producer with producing mines in Vietnam, and a 3.3-million-ounce Bau Gold Project in Sarawak, Malaysia.

The company parted ways with its Vietnamese projects several years ago, and having totally focused in on its Malaysian asset with head-turning attributes, Besra (to be ASX:BEZ) moves towards an ASX listing on Friday. A new chapter is here.

Historically Besra had invested more than US$40 million exploring and drilling out a 3.3-million-ounce resource at the Bau gold project in Sarawak, Malaysia.

Yep. 72.4 million tonnes at 1.43 grams per tonne gold for 3.3Moz.

The project sits on an 8km by 15km heavily gold-endowed fairway, with six major deposits and a further 20 exploration prospects.

The exploration potential is enormous. Besra has already defined an exploration target of 87-112Mt at 1.72-2.55g/t gold for 4.9-9.3Moz. The bulk of this is associated with extensions of existing resource wireframes, most being open at depth and along strike.

Limited exploration work has been undertaken on it since 2014, but as the company eyes relisting it does so with the sort of asset many companies could only dream of.

Besra even completed a stage one feasibility study on Bau in January 2014.

“It’s a rare opportunity, because this IPO is really about restructuring the company balance sheets and putting sufficient structure in place to be able to execute a business strategy which will awaken investors in the gold market to not just the current 3Moz resource base but also to a very significant upside potential,” CEO Dr Ray Shaw told Stockhead.

“The asset is relatively mature from an exploration perspective, with significant further exploration potential remaining – it’s a kind of a mature asset at a restructured price, if you like, with Tier 1 asset potential.”

The IPO has raised in excess of $10 million and Besra will list on the ASX with a $48 million pre-money valuation, or $15/oz of mineral resource.

Post-listing plans

Dr Shaw said in the months following listing the company expected to be able to put two rigs on the ground, with drilling focused on prominent brownfields targets to increase the resource base and grade of the deposits.

It’s a unique position to be in post-IPO, and one Dr Shaw said was uncommon in the local context.

“We’ve got proof of concept, in that we’ve already got 3.3Moz, and we’re looking to take that to the next level,” he said.

“This is not the sort of project that exists in Australia anymore – you don’t get an IPO come on with such a large resource.

“It’s part of a trade-off. They don’t exist in WA for New South Wales or Victoria, but you do need to look into other jurisdictions.

“If you are, a jurisdiction in a Commonwealth country like Malaysia is a pretty good place to be.”

Jurisdictional awareness

Sarawak is a State of the Federation of Malaysia located on the island of Borneo. Besra has a long history in the Bau region, having operated there since the mid 2000s, and in joint venture partner Gladioli has an experienced foot on the ground.

It’s a mining friendly region – the town of Bau is home to a mining museum, and mining particularly for limestone is a major local employer. The State of Sarawak offers incentives to stimulate new resource sector investment, including tax concessions and no royalty on gold production.

The Besra board includes geology and metallurgy specialists with direct personal history with the Bau project. Geologist Paul Ingram has worked at Bau and has a long-standing relationship with Besra’s partners and Robert Dunn, whose background includes metallurgy work on Newmont’s Carlin-style deposits, has studied Bau. The company also has an in-country project manager Kevin Wright, who has more than 43 years of hands-on experience in mining operations including in Malaysia.

Sound foundations for a company about to embark on a new gold chapter.