• Funds will be directed towards drilling and evaluation activities at Paulsens
  • Drilling will target resource growth potential outside of the current mine plan
  • The mine cornerstoned Northern Star’s growth as a gold miner
  • Placement funds will also advance discussions with debt financiers

 

Black Cat Syndicate has received firm commitments to raise $8.3m as it eyes a restart of the iconic Paulsens gold mine in the Pilbara.

The high grade Paulsens mine is renowned for being the project that cornerstoned Northern Star Resources’ (ASX:NST) growth into one of Australia’s largest gold miners.

The mothballed project was picked up by Black Cat Syndicate (ASX:BC8) – along with the even higher-grade Coyote mine in WA’s remote Tanami Desert – from Northern Star as part of a $44.5m deal last year.

In seven months of drilling, the company upgraded resources at Paulsens by 3.7 times to a meaty 328,000oz at 9.9g/t gold. There’s more where that came from, as well.

 

Bolstering cashflow from Paulsens

The funds from the placement will be used to explore the “significant untapped potential” at Paulsens where the company recently flagged bonanza grade hits outside the current mine plan at the Main Zone.

These planned activities will target a substantial increase in cashflow over the recently completed Paulsens restart study – which highlighted estimated revenue of $355.9m, an all-in sustaining cost of $1,892 per oz and operating cashflow of $81.2m.

 

Building on 136,000oz production plan

“We are excited to continue to explore at Paulsens,” MD Gareth Solly said.

“The recent studies we have undertaken give us an enviable baseline for the further optimisation of production outcomes and operating cash flow.

“We are excited to continue to reinvent this iconic mine, where projected future cashflow is expected to increase substantially, together with a reduction in upfront capital expenditure.

“This potential is reinforced by the recent discovery of the Main Zone extension, and the bonanza grades that we are seeing immediately adjacent to areas of the current mine plan.”

 

Directors have skin in the game

Directors have applied for $680,000 in the placement, bringing their investment in the company to $8.7 million to date (subject to shareholder approval).

The placement price represents a 15.1% discount to the last close on 24 August 2023 and a 23.2% discount to the 5-day volume weighted average price (VWAP).

 

Debt financing talks advancing

The company has received indicative term sheets from numerous debt financiers for the restart of Paulsens, with the placement funds also being directed towards advancing these discussions.

Black Cat also expects to release ongoing underground drilling results as they become available for the remainder of the year.

A metallurgical review is planned for September/October, along with surface drilling at the Apollo and Belvedere lodes and regional drilling at the project from October to the end of the year.

 

 

This article was developed in collaboration with Black Cat Syndicate, 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.

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