The September quarter was a “transformational” one for Alto Metals Ltd (ASX:AME), the company explained in its latest quarterly report, having announced its proposed merger with Brightstar Resources while exploration continues to grow the Sandstone Gold Project in the East Murchison of Western Australia.
Brightstar merger
Alto’s proposed merger with Brightstar Resources would see Brightstar acquire 100% of Alto to consolidate the Sandstone gold district in Western Australia, creating an emerging gold producer.
Under the scheme, which has been unanimously recommended by the Alto board and supported by the company’s largest shareholder, Alto shareholders will receive four Brightstar shares for each Alto share held, with an implied value of around 10 cents per Alto share based on BTR’s closing price on October 30, 2024.
Commenting on the proposed merger, Alto managing director Matthew Bowles said the scheme was “a key step towards building a significant gold business and provides Alto shareholders with an exciting opportunity to become part of an emerging gold producer".
“In addition to delivering a significant premium, the scheme, if approved and implemented, will allow Alto shareholders to retain ongoing exposure to the development of the Sandstone Gold Project, as part of a larger resources group holding multiple projects, which will reduce the risks associated with holding a single project," Bowles continued.
“We believe this transaction is a great outcome for Alto shareholders and stakeholders, who will benefit from the development of the Sandstone Gold Project as part of an enlarged gold company with an exciting future.”
Growth and exploration
Drilling at Bull Oak during the quarter demonstrated the continuity of mineralisation, with multiple high-grade quartz reefs, which can report +100 g/t gold, within broad zones of alteration indicating the potential for a larger system.
Results included an “exceptional” reverse circulation (RC) drilling result of 212 metres at 1.2 g/t gold, including 1-metre at 116 g/t gold.
Meanwhile, extensional drilling at Vanguard Camp intersected further high-grade gold. Alto notes that the step-out drilling at the Vanguard North deposit to test extensions of the high-grade reef and a new target along strike, both intersected significant gold mineralisation.
In addition, extensional drilling along strike from the Ladybird deposit has intersected further gold mineralisation.
Subsequent to the quarter end, Brightstar announced a number of business development discussions relating to:
- proposed gold prepayment facility of up to US$11.5 million for general working capital and project development;
- various discussions with multiple parties in the Eastern Goldfields for the processing of ore by way of toll milling or ore purchase; and
- a non-binding indicative offer issued to Aurumin Ltd (ASX:AUN) in relation to entering into a joint venture in respect of AUN’s Central Sandstone Project.