Aerial view of the Paulsens processing facility. Source: Black Cat Syndicate
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  • Black Cat Syndicate (BC8) decides to pause construction at its Kal East project ahead of acquiring projects from Northern Star Resources (NST)
  • The company has emerged from a trading halt, revealing it has secured $35 million to fund the acquisition of the Paulsens and Coyote operations
  • In light of the acquisitions, Black Cat has deferred a decision to build a processing facility at its Kal East operations in Kalgoorlie
  • While the company says the decision to defer work at Kal East wasn’t taken lightly, the potential acquisitions represent a transformational deal for Black Cat
  • Shares have dropped 14.7 per cent, trading at 58 cents at 1:56 pm AEST

Black Cat Syndicate (BC8) has decided to pause construction at its Kal East project ahead of acquiring projects from Northern Star Resources (NST).

The company has emerged from a trading halt, revealing it has secured $35 million through a two tranche placement with shares offered at 55 cents each.

The capital raising will help fund the acquisition of the Coyote and Paulsens gold operations from Northern Star, as the parties enter into binding agreements.

The Coyote gold operation is reportedly the only gold processing facility in the Western Tanami region. While the Northern Territory side of the system has been widely explored, Black Cat said limited exploration has occurred on the WA side.

Currently on care and maintenance, Black Cat believes the operation has all the infrastructure required to restart operations with minimal capital required, with a decision to mine targeted for between 18 and 24 months.

Paulsens is located in the Ashburton basin in the East Pilbara region of Western Australia. The company’s main focus is to extend the mine life of the project’s underground operation.

Cash consideration for the acquisition is $14.5 million payable at the completion date, as well as a further $15 million payable on or by June 30.

Northern Star will also be issued 8.3 million shares in Black Cat escrowed until June 30.

Following the $35 million capital raise, the company said it is well funded to begin its exploration campaign across both projects.

However, in light of the acquisitions, Black Cat has deferred a decision to build a processing facility at its Kal East operations in Kalgoorlie.

It comes amid constraints on labour supply, engineering and construction materials around Kalgoorlie which has been exacerbated by COVID.

With all regulatory approvals received for mining and milling at Kal East, the company said the board remains supportive of the project but has elected to wait for conditions to improve before recommencing work.

According to Black Cat Chairman Paul Chapman, the decision to defer work at Kal East wasn’t taken lightly. However, the potential acquisitions could see production from three operations, once the existing resources and announced ore reserves have grown.

“This is a transformational transaction for Black Cat,” Mr Chapman said.

“We listed on the ASX in January 2018 with 80 square kilometres of land, no resources and no mill.

“This transaction will have us at 1770 square kilometres containing [more than] two-million ounces at 2.5 g/t gold, with two mills and a third well advanced.”

Shares were trading 14.7 per cent lower at 58 cents at 1:56 pm AEST.

BC8 by the numbers
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