Strickland Resources to boost gold bounty through acquisition of Millrose Project

Strickland Resources Ltd (ASX:STK) will boost its gold resource base on the Yandal Belt in Western Australia to more than 600,000 ounces after acquiring the Millrose Gold Project. The company has entered into a binding term sheet with Millrose Gold Mines Limited and Golden Eagle Mining Pty Ltd to acquire the project which is adjacent to the company’s Horse Well Project and the soon to be acquired Yandal East Gold Project. Millrose is around 600 square kilometres in size and is roughly 30 kilometres due east of Northern Star Resources Ltd’s (ASX:NST) 10 million ounces Jundee operation. The acquisition, which will be funded by a $12 million capital raising, completes the company’s consolidation of the north-eastern flank of the Yandal Belt. “Huge footprint in tier-one address” Strickland chief executive officer Andrew Bray said: “It’s been a very busy three months for the new team at Strickland. “In a short period of time, we have put together a new board and management team; bought out Silver Lake’s interest in the Horse Well Joint Venture; acquired the Yandal East project from Renegade Exploration; and injected $13 million of fresh capital into the company, with a further $4 million to come from the upcoming rights issue. “The result of this effort is that the company has consolidated the entirety of the north-eastern flank of the Yandal Greenstone Belt and built up a huge footprint at a tier-one address.” Start drilling in September quarter Bray said: “Of particular excitement for the company is the fact that this part of the belt is significantly underexplored, despite its resource endowment elsewhere and its regional geology. “We are currently gearing up for a major systematic drilling program across this highly prospective gold system, for which we are now very well-funded. “We are scheduled to commence drilling early in the September Quarter 2021.” Millrose deposit The Millrose deposit is in the north-eastern domain of the highly gold endowed Yandal Greenstone Belt. Following the discovery, the deposit was subsequently drilled out through extensive programs of reverse circulation (RC) and diamond drilling. Emerging gold company This acquisition transforms Strickland into an emerging Western Australian gold company. It also increases the company’s resource base to over 600,000 ounces of gold (11.72 million tonnes at 1.60 g/t for 603,000 ounces). The company is currently planning major drilling programs, details of which will be released to the market shortly. Key terms of transaction The company will pay the following consideration to the vendors: $1 million cash upon signing the binding term sheet; $5 million cash within three months of the initial payment; and $4 million within three months of the second payment. The third payment can be structured as $4 million cash or $2 million cash and $2 million in fully paid ordinary shares in Strickland. The share price for the tranche 3 shares will be calculated based on a volume-weighted average price of the shares at the close of trading on the 20 trading days immediately before the third payment date at the company’s election. Capital raising initiative The company has received firm commitments for a conditional placement to eligible institutional and sophisticated investors of 200 million fully paid ordinary shares at an issue price of $0.04 per share to raise approximately $8 million. Enrizen Capital Pty Ltd acted as lead manager for the placement which was supported by JP Equity Partners. The company is also offering eligible shareholders the opportunity to acquire fully paid ordinary shares through a fully underwritten pro-rata non-renounceable entitlement issue of one share for every seven shares held by eligible shareholders on the record date at $0.04 per share to raise about $4.2 million. Use of funds The proceeds of the capital raising will be used to fund: The acquisition of the Millrose Gold project from Millrose Gold Ltd and Golden Eagle Mining Pty Ltd; Continued exploration of the company’s existing and newly acquired projects in Western Australia; Costs associated with the capital raising; and A portion of the company´s working capital needs.