Black Cat Syndicate Ltd (BC8)

Initial Public Offering

DJ Carmichael Pty Limited (“DJC”) is acting as Lead Manager to an initial public offer (“IPO”) being undertaken by Black Cat Syndicate Limited (“BC8”). You should read and consider the Prospectus before deciding whether to invest.

BC8 is seeking to raise $6 million via the issue of 30 million fully paid ordinary shares (“Shares”) at an issue price of $0.20 per Share.
 
IPO Shares will be issued pursuant to a prospectus lodged with the ASIC on 27 November 2017 (“Prospectus”). The Prospectus may be viewed via the following link: www.BlackCatSyndicateOffer.com.au. Please note that the Prospectus must be read prior to bids being submitted. Anyone who wishes to acquire the securities will need to complete the application form accompanying the Prospectus or instruct DJC to complete the form on their behalf.
 
Participation in the IPO is open to all retail, sophisticated and professional investors.
 
BC8 is a West Australian company focused on its Bulong Gold Project situated 25km east of Kalgoorlie. The Bulong Gold Project has a history of complex, unconsolidated ownership leading to small scale but high grade production of an estimated 151,748oz of gold at greater than 1oz per tonne and consists of numerous potentially high grade project areas on granted mining leases with drill ready targets, including Queen Margaret, Queen Margaret North, Porphyry, Woodline and Anomaly 38. BC8 plans to complete infill and extensional drilling around initial exploration targets.

Investment Highlights

Established infrastructure

  • The Bulong Gold Project is situated just 25km east of Kalgoorlie by sealed road
  • Mains power runs through the project with five regional mills, support services and a residential workforce nearby

History of complex, unconsolidated ownership and high grade production

  • Mine production ceased in the early 1900s with an estimate of approximately 152,000oz @ >1oz/t produced
  • The Queen Margaret mine was the main producer with an estimate of approximately 96,000oz @ >1oz/t produced

Consolidated ground with open cut and underground production potential

  • Upon exercise of the options to acquire the projects, BC8 will control 100% of ~82km² of the Bulong Gold Field, of which ~84% of tenements by area are granted
  • The Bulong Gold Project has a history of complex, unconsolidated ownership with small scale, high grade production
  • BC8’s options consolidate the Project bringing together a number of potentially high grade, near term, underground production targets along with shallow open cut positions
  • Numerous potentially high-grade project areas on granted mining leases exist with drill ready targets including:
    • Queen Margaret: shear hosted gold mineralisation with numerous historic mines and drill ready targets, no effective drilling below a mine that is estimated to have produced approximately 96,000oz @ >1oz/t. Better intersections include: 20m @ 3.28g/t Au, 9m @ 3.58g/t Au, 7m @ 10.19g/t Au, 4m @ 7.64g/t Au, 1m @ 54.50g/t Au. A 5km strike of continuous gold mineralisation can be seen, one of the longest continuous gold occurrences in Western Australia
    • Queen Margaret North: hosted in sheared and silicified ultramafics, metasediments and thin porphyry under cover comprising transported sands up to 30m thick; host to the highly prospective Boundary, Virgin Dam, Thrust and Federation targets. Better intersections include: 30m @ 5.75g/t Au, 19m @ 4.54g/t Au, 16m @ 3.13g/t Au, 14m @ 5.10g/t Au, 11m @ 2.85g/t Au
    • Porphyry: hosting the Trump and Ramsgate targets being a felsic schist, ultramafic, porphyry system similar to the package that hosts Kanowna Belle (10m oz). Better intersections include: 7m @ 8.06g/t Au, 3m @ 5.27g/t Au.
    • Woodline: a significant alluvial gold field and host to the highly prospective Patch Dam and Woodline targets. Better intersections include: 2m @ 28.3g/t Au, 10m @ 5.03g/t Au
    • Anomaly 38: covered with 10-50m of transported sand, bedrock geology is composed of cumulative textured ultramafic rocks with rare spinifex texture, also basalt and felsic volcanics in places. Better intersections include: 5m @ 16.91g/t Au, 4m @ 7.05g/t Au, 4m @ 23.94g/t Au, 7m @ 9.37g/t Au
  • BC8 has advised that its concept is to drill and study the economics of developing an open cut at Queen Margaret, then declining from the open cut into footwall and eastern zones and developing across to historic workings while assessing backfill volumes and grade

Option and conditional agreement to acquire additional tenements

  • Commercial terms to acquire:
    • Up Front Fees $80,000 [Paid]: Right to conduct due diligence, financing and exploration until 28 February 2018
    • Extension Fees $70,000: Right to extend option until 31 August 2018
    • Exercise Amounts $850,000, plus 1m Black Cat shares, 1% gross royalty on specified tenements
  • Other costs: GST ~$100,000 (refundable), stamp duty ~$50,000 

Junior Mineral Exploration Tax Credit (“JMETC”)

  • Investors may qualify for tax credits under the government’s proposed JMETC scheme
  • If BC8 is found to be an eligible company under the Scheme, the Company can generate tax credits by giving up a portion of its tax losses from greenfield mineral exploration expenditure, which can then be distributed to shareholders
  • Australian resident shareholders that are issued with a tax credit would be entitled to a refundable tax offset or additional franking credits
  • BC8’s carry forward losses would be reduced to reflect the amount of the credits created
  • The legislative package for the scheme is yet to be finalised and the outcome is not certain, but it is intended that the scheme will be retrospectively applied to 1 July 2017 until 30 June 2021
  • Investors should seek their own tax advice on this matter

Experienced board and management with a track record of successful exploration and bringing similar gold assets into production

  • Paul Chapman (Chairman): Chartered Accountant with over thirty years experience in the resources sector; non-executive director of Avanco Resources (AVB) and Encounter Resources (ENR). Founding Chairman and shareholder of Silver Lake Resources (SLR), Rex Minerals (RXM) and Paringa Resources (PNL).
  • Gareth Solly (Managing Director): First Class Mine Honours Degree in Earth Sciences from the University of Melbourne and over 18 years of industry experience; formerly Chief Operations Geologist and Registered Mine Manager having been employed by Saracen Minerals, SLR and Norilsk Nickel. Gareth was the Chief Geologist and later Resident Manager at Mount Monger, which is similar to the Bulong Project, and involved managing a workforce of approximately 200.
  • Les Davis (Non-Executive Director): Master’s Degree in Mineral Economics from Curtin University and over 38 years mining industry experience; founding Managing Director and current non-executive director of SLR.
  • Alex Hewlett (Non-Executive Director): degree in Earth Science from the University of Western Australia and a member of the Australian Institute of Mining and Metallurgy; CEO of Hammer Metals (HMX) and chairman of Spectrum Rare Earths (SPX).

Funds raised via the IPO will be utilised as follows and as outlined in Sections 6.3 and 14 of the Prospectus:

  • Exploration expenditure at the Bulong Gold Project
  • Exercise of Bulong option
  • Acquisition of Edwards tenements
  • Costs of the IPO
  • Administration and working capital costs

Proposed capital structure

BC8 fig.1.png
 

An indicative timetable for the IPO is set out below:

BC8 fig.2.png
 

*The Company reserves the right to close the IPO early without notice.

As Lead Manager to the IPO, DJC is entitled to a fee of 6% plus GST on the gross amount raised under the IPO, as well as 3,000,000 unquoted options exercisable at $0.20 on or before the date that is five years from the date of issue. BC8 has engaged DJC to act as Corporate Adviser for a period of 12 months from 15 November 2017 at $10,000 plus GST per month (or part thereof). DJC retains the right of first refusal to manage and carry out any capital raisings undertaken by the Company until 15 November 2018. BC8 paid the cost of a visit to the Bulong Gold Project by representatives of DJC in November 2017 valued at approximately $3,300. DJC is entitled to be reimbursed for all reasonable out-of-pocket expenses directly related to its role as Corporate Adviser and Lead Manager, subject to BC8’s consent prior to incurring any single expense greater than $2,000.

DJC earned fees of $25,688 excluding GST for the management of seed capital raise for the Company. DJC and/or its advisers hold 3,950,000 securities in BC8 comprising 9.7% of the pre-IPO issued capital, or up to 5.3% of the securities on completion of the IPO.

Please contact your Investment Adviser by 10am WST Wednesday 6 December 2017 should you wish to bid for an allocation. The Offer close date according to the Prospectus is 19 December 2017, however the Company reserves the right to close the book early with no notice.