Linden Gold merges with Lord Byron Mining

Linden Gold merges with Lord Bryon Mining

Strategic merger of operational and development

Linden Gold Alliance Limited (Linden or the Company) is pleased to announce the merger with Lord Byron Mining Pty Ltd (Lord Bryon), a privately held gold mining company south of Laverton which owns the Lord Byron and Fish open pit mines.

Merger Highlights

  • Merger with Lord Byron advances the consolidation of gold production, development, and exploration assets of both companies strategically located in the south Laverton goldfields.
  • Combines the experienced and highly regarded management teams with complementary skills sets in both underground (Linden) and open pit (Lord Byron/Blue Cap Mining).
  • Adds 292,900 in development Resource ounces (of which ~120,000oz is M&I) to existing south Laverton portfolio, which aligns with Linden’s focus on mineable ounces.
  • Ashley Fraser, previously a founder of Orionstone (now Emeco) and Blue Cap Mining to join Linden board in an executive role focused on development and growth of the merged company.
  • Merger creates potential for step change in annual production to grow from current base of 22,000oz p.a. to +50,000oz p.a. as the foundation for a target production rate of 100,000oz p.a.
  • Lord Byron open pit and Fish underground scoping studies indicate strong free cash flow generation from the project over next several years, allowing for both open and underground mining methods.

Key Transaction Details

  • Linden and Lord Byron have completed a merger whereby Linden is acquiring 100% of the shares in Lord Byron for AUD $21.1m comprising cash and Linden shares.
  • At completion:
    • 31.25m Linden shares issued to Lord Byron shareholders with a deemed value of $5.0m based on an issue price of $0.16 per share.
  • Future contingent share payments comprise:
    • $5.0m in Linden shares upon Mineral Resource exceeding 400,000 oz gold on the Lord Byron tenements;
    • $5.0m in Linden shares upon Minable Ore Reserve exceeding 120,000 oz gold on the Lord Byron tenements; and
    • $5.0m in Linden shares upon first commercial mining being undertaken on the Lord Byron tenements.
  • Transaction is completing on a cash free / debt free basis with Blue Cap Equities (Lord Byron’s major shareholder) to forgive $2.4m of Lord Byron debts in return for cash payments of $350,000 at completion and $750,0000 future contingent payments linked to capital raise events such as an IPO.
  • Strengthened balance sheet and capital structure strongly backed by major shareholders St Barbara Limited (27.3%), Lord Byron shareholders (18.6%) Linden’s founders (20.2%).
  • Linden’s inhouse underground mining expertise will expand to include open cut mining, exploration, and processing with the assistance of Blue Cap Mining to support new and ongoing open cut mining services via the provision earthmoving equipment, labour, technical, supervision and management skills.

Next Steps

  • Linden and Lord Byron have commenced implementing the consolidation of respective assets and teams.
  • The Company is planning to release a Strategic Plan to its shareholders late this calendar year incorporating:
    • finalised scoping studies of the Lord Byron open pit and Fish underground development opportunities;
    • reset mine life and plan for the Second Fortune underground operation;
    • indicative timeframes for feasibility work on the consolidated assets targeting to scale Linden’s existing production profile;
    • update on the Company’s plans for securing processing arrangements for the processing of ore from multiple mining operations;
    • indicative exploration budgeting and timing including prioritisation of targets; and
    • presentation of synergies achieved or expected to be achieved by the Linden-Lord Byron merger including access to mining fleets, economies of scale, access to camp and airstrip infrastructure, potential expansions of existing commercial arrangements and G&A/corporate savings.

About Lord Byron

Lord Byron is a privately owned mining company with mine ready resources on over 4,000 hectares of granted mining leases, exploration and miscellaneous licenses located in the southern Laverton region, some 65km northeast of Linden’s Second Fortune underground mine. Lord Byron’s key projects are the Lord Byron open cut mine, Fish underground mine which are production/mine ready (<6months) along with exploration targets in Gilt Key and Fish south.

The combined resources presently measure (JORC 2012) 4.92 million tonnes at 1.85g/t for 292,900 ounces contained gold. Recent studies indicating minable tonnes from this present resource of circa 1.7 – 2.5M tonnes at ~2.0 g/t for 101-149,000 production ounces.

The project is expected to be expanded significantly with high prospectivity targets including the at depth expansion of Fish underground beyond a depth of 160 metres, resource and reserve expansion at Lord Byron along strike and at depth beyond 20 metres, along with near surface Gilt Key and recently identified targets at Fish south.

Discovered by Western Mining in the 1990s, the project was recently developed and mined by Blue Cap Mining prior to Covid in 2019/20. Glencore’s Irwin Hills Project, Panther Metals Gold projects, WMGs Jasper Hills and Brightstar’s Gold Processing Plant neighbour the project in the immediate vicinity.

The company also owns the miscellaneous licences for over 65km of major haul road providing potential access for Glencore Irwin Hills, and to Brightstar Gold Plant and other major gold processing plants such as Granny Smith, Sunrise Dam, and Mt Morgans.

Appointment of Ashley Fraser to Executive Director

Ashley is an experienced mining and heavy industries executive with over 30 years’ of mining engineering, operational and executive experience in gold, copper, manganese and coal. A founder of Orionstone (which merged with Emeco in 2016 via a AUD $660m consolidation) and founder/owner of Blue Cap Mining (open pit mining services) and Blue Cap Equities (private equities fund).

Ashley is a director of various private boards and recently as Non-Executive Director of Onsite Group helped to complete the company’s turnaround to execute a high shareholder return sale to Sime Darby earlier this year for AUD $635m.

Having direct and extensive experience with merger/acquisitions, private equity, debt and capital markets including exposure to US Bond markets, Ashley brings to the board complementary skills focused developing and growing Linden over the next several years.

Blue Cap Mining

Blue Cap Mining has developed and mined several small to medium Western Australia and North Queensland gold mines including Bullseye Mining’s Bungarra Neptune (recently acquired by Emerald Resources) and Pennys Find gold mine, among several other public and private operations in Queensland and New South Wales.

Lead by an experienced executive team, the company provides technical (specifically mining, exploration and processing) open cut mining services and process plant operations. Via related Blue Cap Mining associates, the group also provides development funding to advance projects it is involved with including up to AUD $16m for one project.

The company is also presently retained by Magnetic Resources NL (ASX: MAU), helping develop its Lady Julie projects south of Laverton along with engagement with various other mining entities both public and private. The group and related entities retain private gold mining interests near Southern Cross and in northern Queensland.

Linden Managing Director, Andrew Rich commented,

“We are excited to have executed this merger with Lord Byron which provides a strong consolidated pipeline of producing, development and exploration projects which collectively provide scale and grade in our region. We look forward to welcoming Ashley Fraser to the Board in an executive capacity to contribute to Linden’s next phase of growth and deliver on its strategic plan – Ashley shares the work ethic and ambitions of the Linden team centred on developing new mines. Ashley brings open pit mine contracting experience and capability via Blue Cap Mining including access to equipment, people and skills which complement Linden’s expertise in underground mining. We look forward to moving forward together leveraging our collective strength in project development and gold production.”