The Black Cat Syndicate Ltd (ASX: BC8) share price was a standout performer on the ASX today, catching the eye of small-cap ASX investors with an intra-day rise of as much as 46.94%.
Black Cat shares shot up after being reinstated to official quotation in afternoon trade. Shares eventually simmered down somewhat to close out the day 30.61% higher at 64 cents per share. This brings Black Cat's current market capitalisation to around $54 million.
Black Cat Syndicate is a small-cap ASX gold miner. Its primary focus is on advanced exploration and development of the high-grade Bulong Gold Field, which is located 25km east of Kalgoorlie, Western Australia. Bulong is the result of the consolidation of a number of small-scale, high-grade mines and is comprised of around 82 square kilometres of mainly granted tenements, all 100% controlled by Black Cat.
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Why the Black Cat Syndicate share price rocketed today
On Tuesday morning, Black Cat requested its shares be suspended from official quotation, pending the release of an announcement regarding a potential acquisition.
That announcement came this afternoon, when Black Cat revealed it had entered a binding agreement to acquire 2 gold projects from Silver Lake Resources Limited (ASX: SLR), subject to the satisfaction of certain conditions.
The 2 projects are:
- The Fingals Gold Project which comprises ~64 square kilometres of land and is located 30km south-east of the Bulong Gold Project; and
- The Rowe's Find Gold Project which comprises ~41 square kilometres of land and is located 100km east of Bulong.
Upon completion of the acquisition, Black Cat's landholding will increase from 168 square kilometres to 233 square kilometres.
Additionally, Fingals and Rowe's Find have a combined JORC Mineral Resource Estimate of 5.2 million tonnes at 2.5 grams per tonne (g/t) gold for 425,000 ounces. This is expected to increase Black Cat's total resources by 145% to 8.7 million tonnes at 2.6 g/t gold for 716,000 ounces.
Under the terms of the acquisition, Black Cat will pay a non-refundable deposit of $50,000. It will also issue around 8.4 million ordinary shares to Silver Lake, making Silver Lake a substantial shareholder in Black Cat.
The acquisition is conditional upon the completion of due diligence by Black Cat by 27 June 2020. Subject to the satisfaction of the conditions, the acquisition is expected to be completed in early July 2020.
Commenting on today's update, Black Cat's managing director Gareth Solly said:
"Fingals and Rowe's Find have clear synergies to our Bulong Gold Project. The new projects contain 44 tenements of which 28 are Mining Leases with minimal barriers to mining. With this acquisition, we will increase our Resources by 145% to 719,000oz, add high quality exploration targets as well as near term mining opportunities. All this without significantly impacting Black Cat's cash position."
"We will complete due diligence and rank the exploration and mining opportunities accordingly. We also look forward to welcoming Silver Lake as a substantial shareholder upon completion of the Acquisition," he added.
