$5m cash injection boosts Brightstar’s +1Moz gold study momentum

Brightstar raises $5m to carry out exploration programs and PFS work at the Menzies and Laverton gold projects
The placement enables BTR to purchase key mine site equipment and infrastructure at a significant discount to replacement costs
~5,000m of RC drilling to be completed in Q4 CY23, along with infill and extensional RC and diamond drilling campaigns early in the new year

Special Report: A strongly supported capital raising of $5m will see Brightstar funded to accelerate exploration activity and complete pre-feasibility (PFS) works for the Menzies and Laverton gold project restart.

Brightstar (ASX:BTR) is perfectly placed to carry out exploration activities across the +1Moz Menzies and Laverton projects in WA’s Leonora-Laverton district following a $5m placement cornerstoned by two high quality investors, Collins St Asset Management and a US family office, who increased their existing holding to become a substantial shareholder.

The company is targeting an upgrade of the existing resource in 2024 and with the addition of anticipated proceeds from the Selkirk mining JV at Menzies, BTR will be fully funded to complete its mine re-start PFS next year.

Placement proceeds will be used to fund exploration programs, resource definition activities, pre-feasibility study work, asset purchases, costs of the issue and general working capital.

According to BTR managing director Alex Rovira, the fundraising enables the explorer to execute key asset purchases that will crystalise significant capex and opex savings when compared to the economics outlined in the September scoping study.

5,000m of drilling to tick off

“The mining camp and CIL tanks being purchased for cash consideration at around 10% of the replacement cost represents a compelling use of funds for Brightstar that make a significant and tangible positive difference to our mine restart plans,” he says.

“We also have 5,000m of RC drilling to complete in the remainder of Q4, CY2023 along with comprehensive infill and extensional RC and diamond drilling campaigns early in the new year at the Cork Tree Well deposit in Laverton and across the Menzies gold project for inclusion within the PFS.”

Placement details

The placement price of $0.011 per share represents a small 9% discount to the 30-day volume weighted average price (VWAP) of $0.0122.

Exploration paves way for mine design and processing pathways

On the exploration and resource definition front, BTR will use the funds to undertake drilling programs on advanced assets such as the deposits at Cork Tree Well (Laverton) along with Yunndaga and the Lady Shenton System within the Menzies gold project.

These programs will include reverse circulation and diamond drilling, which will be guided by independent geotechnical and metallurgical consultant recommendations within pit shells generated as part of the Scoping Study.

BTR says information gained from these programs will provide details for mine design and processing pathways to reduce risk, streamline further workflows, and optimise project outcomes.

Assets purchases improve financial metrics within PFS

The developer has also taken advantage of two compelling opportunities to purchase key infrastructure required for the planned recommencement of mining operations.

These assets also expected to significantly improve the financial metrics within the PFS, BTR says.

These assets will be acquired at significant discounts to replacement value and include:

A well-maintained mine site accommodation facility, consisting of 52 ensuite rooms and a laundry block, inclusive of all items required for immediate use, for total cash consideration of $420,000, with an estimated replacement value of over $4,000,00;
And six 6m x 6m reconditioned carbon-in-leach (CIL) adsorption tanks for total cash consideration (including delivery to the Laverton mill) of $110,000, which have an estimated replacement value of $1,000,000.

PFS on the fast track

For now, BTR is working on various studies on environmental, social and heritage surveys to support project development activities at Menzies and Laverton.

These studies have been expedited to provide Brightstar with the optionality of commencing early works at Menzies and Laverton to potentially take advantage of current high gold prices and accelerate revenue-generating opportunities.

This article was developed in collaboration with Brightstar Resources, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.