Bryah to spin advanced gold project into new IPO, Star Minerals

Bryah Resources (ASX:BYH) has a plan to help it focus on its core copper-gold exploration projects while retaining significant exposure to near-term gold production at Tumblegum South.

The agreement with Star Minerals will see Bryah receive $500,000 cash, 9 million shares (valued at $1.8m) and 7m performance rights.

Bryah will likely hold 21.6 per cent equity in the new explorer upon its successful ASX listing, which could increase to over 30 per cent through conversion of performance rights upon commencement of gold production at Tumblegum South.

Both transactions are conditional upon Star Minerals undertaking its $5m IPO and obtaining ASX approval to list by 31 May 2021.

Selling the Tumblegum South gold deposit allows Bryah to focus on exploration for new high-grade copper-gold deposits at its flagship Bryah Basin project and on the remainder of its Gabanintha project, Bryah managing director Neil Marston says.

“By selling the project to Star Minerals, Bryah has secured a funding solution for the development of this gold deposit without diluting Bryah’s existing shareholders,” he says.

“Bryah and its shareholders will retain significant exposure to the successful development of the Tumblegum South gold deposit through Bryah’s major shareholding in Star Minerals.

“Upon successful completion of its IPO, Star Minerals will be fully funded to take over carriage of this project, and hopefully achieve a swift path to gold production under the arrangements Bryah put in place in 2020.”

Bryah will also sell another WA tenement to Star for 2,000,000 fully paid ordinary shares (valued at $400,000) as well as a 0.75 per cent royalty on any future production.

Tumblegum South: a near-term development opportunity

The Tumblegum South gold deposit has an Inferred Mineral Resource of 600,000 tonnes grading 2.2 g/t gold for 42,500oz.

Bryah to spin advanced gold project into new IPO, Star Minerals — Tumblegum South. Picture: Company supplied

“The Tumblegum South gold deposit sits on a mining lease which was granted in November 2020,” Marston says.

“In December 2020 Bryah signed a development agreement to potentially access the Kirkalocka gold processing facility to treat gold-bearing material from Tumblegum South.

“This development agreement with Kirkalocka Gold remains in place and Star Minerals will assume Bryah’s rights and obligations under the agreement at completion.”

This article was developed in collaboration with Bryah 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.