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Bryah Resources (ASX:BYH) - Managing Director, Neil Marston
Managing Director, Neil Marston
Source: Perth Media
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  • Byrah Resources (BYH) has sold its Tumblegum South gold deposit in the Gabanintha Project in Western Australia to Star Minerals for $500,000
  • The Tumblegum South gold deposit has an inferred mineral resource of 600,000 tonnes at 2.2 g/t gold for 42,5000 ounces gold.  
  • The agreement also comes with 9 million shares valued at $1.8 million in Star Minerals and 7 million performance rights, resulting in Bryah now holding around 21.6 per cent equity in Star
  • Bryah is also selling Star its E52/3739 exploration licence for an additional 2 million shares in Star Minerals
  • The company says these transactions will allow it to focus on copper-gold exploration, while still retaining significant exposure to gold production at Tumblegum South
  • Byrah shares are up 1.75 per cent, trading at. 5.8 cents

Byrah Resources (BYH) has sold its Tumblegum South gold deposit in the Gabanintha Project in Western Australia for $500,000.

A agreement was executed with Star Minerals for the deposit within the gold-rich Meekatharra region of WA and is subject to Star receiving conditional approval from ASX to admit its securities to official quotation by May 31, 2021.

The Tumblegum South gold deposit has an inferred mineral resource of 600,000 tonnes at 2.2 g/t gold for 42,5000 ounces gold.  

Under the agreement, Bryah will receive $500,000 cash plus 9 million fully paid ordinary shares in Star Minerals for the deposit, valued at $1.8 million. It will also receive 3 million Class A Performance Rights, vesting upon a measured mineral resource report, and 4 million Class B performance rights, connected to commercial gold production.

Each performance right will convert to one fully paid ordinary share in Star, once the company achieves each milestone. This will result in Bryah holding close to 21.6 per cent equity in Star Minerals once listed, with the potential for this to increase to up to 30 per cent through the conversion of performance rights.

“Disposal of the Tumblegum South gold deposit allows Bryah to continue its focus on exploration for new high-grade copper-gold deposits at its flagship Bryah Basin project and on the remainder of its Gabanintha Project,” said Bryah Resources Managing Director, Neil Marston.

“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.”

In the coming weeks, Star Minerals plans to undertake a $5 million capital raise via an initial public offer to raise the funds.   

“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,” Neil said.

It is expected that the Star Mineral shares issued to Bryah will be subject to a one-year escrow period.

Additionally, Bryah has also signed a tenement purchase and royalty agreement with Star Minerals for its E52/3739 exploration licence, which was acquired by Bryah in 2019 within the western part of the Bryah Basin.

Bryah will receive 2 million fully-paid ordinary shares, valued at $400,000 in the capital of Star Minerals, plus a 0.75-per-cent net smelter return royalty for selling E52/3739.

Bryah says these transactions will allow them to focus on copper-gold exploration, while still retaining some exposure to gold production at Tumblegum South.

Byrah shares are up 1.75 per cent, trading at. 5.8 cents at 9:25 am AEDT.

BYH by the numbers
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