QLD demerger frees Broken Hill for SA gold focus

Broken Hill Gold has completed the strategic demerger of its North Queensland portfolio, transferring its Alice River gold and St George gold-antimony projects to Manda Resources. The deal clears the decks for an all-out focus on its White Dam gold operation in South Australia.

The transaction hands Manda Broken Hill’s 100 per cent interest in Alice River and its St George earn-in rights for 64M Manda shares valued at $16M, plus $650,000 cash payable on Manda’s ASX admission. Subject to shareholder approval, all the shares, valued at 25 cents each, will be distributed in specie to eligible shareholders, retaining their exposure to the Queensland story. Under indicative terms announced in June, they would receive one Manda share for every 6.76 Broken Hill shares, with the final ratio set at the record date.

ASX-listed mining junior Emerald Resources has also brought heavyweight backing and a safe pair of hands to Manda. The company initially invested $6.4M into Manda’s $9M pre-IPO seed raising for a 49 per cent shareholding. It has since flagged another $4.25M investment in the initial public offering, which is expected to raise at least $21M, subject to market conditions. Emerald intends to maintain a 19.9 per cent Manda holding at listing.

Manda has also wrapped up its acquisition of Territory Minerals, bringing the Tregoora, Northcote, Atric and Reedy gold projects under the same roof. Alice River contributes 26.8 million tonnes at 1.00 grams per tonne (g/t) gold for 854,000 ounces, while Territory adds 480,000 ounces, giving the portfolio 1.33 million ounces across more than 1700 square kilometres.

Manda has also strengthened its leadership, putting veteran exploration geologist Tara French at the helm as chief executive officer. French brings more than 25 years’ experience and was most recently Cazaly Resources’ managing director after serving as Regis Resources’ general manager, exploration.

At Alice River, Manda inherits plenty to chase along a 30km prospective strike on the Alice River Fault Zone, part of a regional-scale intrusion-related system Broken Hill has compared geologically with globally significant gold systems Fort Knox in the United States and Hemi in Western Australia.

Its nearby St George project adds a 905-square-kilometre gold-antimony footprint, where exploration has defined more than 20km of mineralised and geochemical strike, yet drilling has tested just 200m. That leaves plenty of room to build on early high-grade antimony and gold hits.

Broken Hill Gold managing director Matthew Boyes said: “This strategic demerger is a highly compelling transaction. Having Emerald Resources’ management driving this new vehicle is a real endorsement of the geological potential at the Alice River and St George Projects. Manda’s concurrent acquisition of Territory Minerals will create a dominant explorer in a region with clear multimillion-ounce potential.”

Attention now turns to Manda’s listing. Its prospectus and Broken Hill’s notice of meeting are targeted for early November, with the shareholder vote due in early December and Manda’s targeted ASX admission in mid-December.