Strickland Metals acquires 5.4Moz gold project in Serbia for $37m
Wed April 17 2024
Strickland Metals has snapped up the Rogozna gold project in Serbia – which contains a mammoth 5.4Moz of gold endowment – from Zlatna Reka Resources.
With a strong cash position from the $61 million sale of its Millrose gold project in WA to Northern Star Resources (ASX:NST), Strickland Metals (ASX:STK) is taking its exploration credentials international – starting off with the unique gold-copper-zinc project in the Balkans.
A number of global majors have significant Serbian projects, including BHP (ASX:BHP), Rio Tinto (ASX:RIO), Vale, Zijin Mining, Kinross Gold and Dundee Precious Metals.
In the mid-cap space, Adriatic Metals (ASX:ADT) has paved the way for exploration companies operating in the region – listing for 20c in 2018 to now become an $800 million market-capped company with a share price of about $4 from proving up its silver deposits.
The Rogozna gold project comes with $60 million worth of previous work in an established mining district. It has walk-up targets from previous drilling to assess, where assays returned 352m at 2.1g/t gold equivalent from 240m, including 97.7m at 5.1g/t from 321m.
Rogozna purchase
STK purchased 184sq km Rogozna from Zlatna Reka in a scrip deal which will see the issue of just under 380 million shares at a share price equal to the 10-day VWAP, or 9c per share, at the completion of the acquisition.
An upfront cash payment of $750,000 has already been paid and Strickland will also assume responsibility for $1.66 million of outstanding convertible notes. At 9c per share the total acquisition cost is worth approximately $37 million.
Outgoing CEO Andrew Bray says the company is thrilled to announce the purchase of the large scale 5.44Moz gold Rogozna project.
“We obviously have an exceptionally strong cash position for an exploration company and Rogozna represents the perfect opportunity through which we can deploy some of that additional balance sheet strength,” he says.
“The acquisition of Rogozna is being undertaken at an attractive valuation metric of about $6.80/oz gold equivalent and being conducted primarily via the issue of escrowed Strickland scrip, with the acquisition representing only 19.4 per cent of the post transaction capital structure.
“We see the project as offering tremendous leverage to a rapidly improving gold price environment.
“In our view, the project has the potential to grow into one of the largest undeveloped gold deposits globally (with significant copper and zinc).”
Upcoming exploration
An 18-month series of exploration programs is targeting a minimum of 60,000m of diamond drilling, as well as metallurgy, soil geochemical and geophysical programs post completion of the transaction.
A minimum of three diamond rigs have been planned to spin at the four primary targets of Shanac, Medenovac, Gradina and Copper Canyon.
An additional diamond rig will be allocated to assess high-order, undrilled exploration targets including copper-gold porphyry targets.
Management changes
Once the acquisition of Rogozna is completed, STK plans to appoint Ibaera Capital founder Paul L’Herpiniere as managing director and Dr Jon Hronsky OAM as a non-exec director, while CEO Andrew Bray will be stepping out of his role.
With more than 40 years of experience in the resources space, L’Herpiniere is the previous exploration manager of Fortescue Metals (ASX:FMG).
L’Herpiniere and Dr Hronsky – who received the Order of Australia Medal for services to the mining industry – have been heavily involved with Rogozna since 2017.
Bray says that he couldn’t happier and more confident in the team to take the company forward.
“In my view, Strickland now has one of the best management and exploration teams around, along with two outstanding projects and the balance sheet strength to fully extrapolate maximum value from the portfolio,” Bray says.
“This is the ideal recipe for a very promising period STK’s development, especially given the strong outlook for gold prices.”
Source: https://www.heraldsun.com.au/