Gateway Mining (ASX:GML) has sold off its WA-based Eastern Montague gold project to Brightstar Resources (ASX:BTR) for a neat $14M.
However, $9M of that will be made up of Brightstar shares and a smaller $5M component in cash. Gateway says this allows it to continue exploring for nickel, copper, and platinum group elements while having upside exposure to BTR’s share price.
Gateway will retain ownership of all mineral tights in the ‘Western Tenement Group’ at Montague, a target area with “extensive near-surface gold mineralisation.”
Gateway will now “aggressively explore” its “exciting [and] new” copper-nickel-platinum group elements prospects at Montague East, which Gateway noted includes the Flametree target boasting historical drill hits under 5 metres and less than 1% copper.
There’s also the fact copper and nickel prices have taken a dive in recent months, not at all helped by the recent Chinese Third Plenum that failed to convince the market the Chinese economy would be recovering quickly any time soon.
And so what about the share deal? Brightstar’s share price is 1.5 cents and has returned +25% over the last year and has a market cap of $70M.
The company issued a trading halt on Wednesday ahead of a capital raising; it also flagged today’s news from Gateway Mining. While BTR’s four week average share turnover is currently 4.5M; its chart gives away the fact the company is somewhat illiquid.