Australian-based junior explorer Minerals 260 (ASX: MI6) has agreed to acquire the Bullabulling gold project in Western Australia from Chinese-based minerals giant, Zijin Mining (SH: 601899) for a mixed cash and shares deal worth A$166.5 million.
On Monday, Minerals 260 announced its plans to fund the acquisition through equity fundraising. The raise will be managed by Bell Potter Securities and Argonaut.
Minerals 260 emerged as a spin-off from Australia-based lithium producer, Liontown Resources (ASX: LTR). It listed on the ASX in late 2021 after raising A$30 million through an initial public offering. Tim Goyder, a renowned Australia based prospector and entrepreneur who also chairs Liontown, leads Minerals 260 as its chair. Goyder described the acquisition as a transformational opportunity, capitalizing on record-high gold prices in Australia.
“We believe that this opportunity, or this project, will deliver for us, and there’s no reason why we can’t build a substantial company,” Goyder said on Tuesday.
Bullabulling, located 65 km southwest of Kalgoorlie, was discovered in the 1960s. Resolute Mining (ASX: RSG) produced 179,000 ounces of gold from the site before placing it on care and maintenance in 1998. Zijin, through its subsidiary Norton Gold Fields, acquired the project in 2014 for A$25 million. The project contains a resource of 60 million tonnes at 1.2 grams per tonne gold, amounting to 2.3 million ounces.
“We’ve done the deepest due diligence of my career to ensure the resource stacks up,” said Luke McFadyren, the managing director of Minerals 260.
The project leverages its proximity to infrastructure, including power, water, the Great Eastern Highway. It also has established mining leases, and a Native Title Land Use Agreement.
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Minerals 260 aims to conduct 80,000 meters of drilling
Minerals 260 plans to fast-track development by capitalizing on current gold prices exceeding A$4,000/oz. The company aims to conduct 80,000m of drilling to complement the 530,000m completed previously, focusing on the underexplored southern areas. Studies will begin by September 2025, with the goal of defining a maiden reserve in the north, where 89 per cent of the ounces are in the indicated category.
“You won’t see us go slow on this. This is going to be accelerated all the way,” McFadyen said. He added the project doesn’t need A$4,200/oz gold to be profitable because the pit shells were calculated at A$3,000/oz.
Minerals 260, which most recently drilled the Moora copper-gold project in WA, told shareholders that it was actively seeking other opportunities. After calling a trading halt on January 2, the company suspended its shares from trading, as it must re-comply with ASX listing rules due to the acquisition’s scale.
The company will issue a prospectus for the equity raising and seek shareholder approval at a March meeting. McFadyen explained that the deal significantly changes the company’s scale, making re-compliance necessary.
“We’re a A$30 million company buying a A$166 million asset,” he said.
Goyder expressed confidence in replicating Liontown’s success, which recently completed the A$1 billion Kathleen Valley project.
Minerals 260 anticipates resuming trading by late March or early April.
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Zijin divests to focus on operation of current assets
Zijin Mining Group Co., Ltd has been on a strong mergers and acquisitions streak for the past year.
First, Zijin is a major global mining company specializing in the exploration and extraction of various metals, including copper, gold, zinc, lithium, silver, and molybdenum.
In January 2025, a subsidiary of Zijin proposed acquiring a 24.8 per cent stake in Zangge Mining for 13.7 billion yuan (approximately $1.87 billion) to secure a controlling interest and strengthen its ownership of the Julong copper project in Tibet.
In October 2024, Zijin also agreed to purchase the Akyem gold mine project in Ghana from Newmont Corporation (TSE: NGT) (NYSE: NEM) for $1 billion, reinforcing its presence in West Africa and its position as a significant player in the global mining industry.
Zijin Mining Group decided to divest the Bullabulling gold project to optimize asset allocation and concentrate on enhancing existing production facilities.
According to a statement on Zijin’s website, Norton Gold Fields, a wholly-owned subsidiary of Zijin, initiated the sale process for the Bullabulling project in 2022 to focus on the construction and operation of its current assets, improve cost control, and strengthen cash flow.
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joseph@mugglehead.com
