Black Cat Syndicate Ltd (BC8) - Research Report

Myhree Resource upgraded, now the focus turns to development

Black Cat (BC8) is a junior gold explorer controlling 100% of the ~87km2 Bulong Gold Project, situated just 25km east of Kalgoorlie in WA. BC8’s proven management team, which includes ex-founding Silver Lake Resources (SLR) directors, is focussed on rapidly progressing its assets towards development. The recent upgrade brings the total Resource at the project to 2.3Mt @ 2.4 g/t Au for 178,000 oz with 2.0Mt @ 2.4 g/t Au for 151,000oz potentially open pit mineable. A Feasibility Study will be commenced to progress the Myhree/Trump deposits to a decision to mine, with results expected in the June 2020 quarter. Drilling along the Boundary-Myhree corridor is ongoing, with the next resource upgrade at the Boundary and Trump deposits planned for the September 2019 quarter.

Key Points

  • Myhree Resource increases by 138% to 1.4Mt @ 2.7g/t Au for 119,000oz: The upgraded Resource, which remains open at depth, now paves the way for the potential development of an open pit mine down to ~210m below surface. Based on optimisation studies, 87% of the Resource is considered open pit mineable using an A$1,800 gold price. 33,000oz @ 2.7 g/t Au have also moved up to an Indicated classification. BC8 expect the total resource to increase as extensional drilling continues and remains constrained by a lack of drilling at depth.

  • Myhree optimised pit shell now draws into the middle of the Trump deposit: The Trump Resource is due to be upgraded in the September 2019 quarter and is not yet counted as part of the Myhree Resource, which previously sat ~50m away from each other. The economics of Trump are likely to be enhanced with further drilling and optimisation work following the next Resource upgrade and as part of pre-mining activities.

  • Transitioning from explorer to developer: BC8 will immediately commence a Feasibility Study at the Myhree and Trump deposits, with results due in the June 2020 quarter. With many targets available at the Bulong Project, Management’s focus on bringing these deposits into development, potentially providing near term cash flow is the right strategic decision in our view.

The following work will be conducted as part of the decision to mine:

  • infill drilling to convert Inferred Resources to Measured & Indicated

  • diamond drilling for geotechnical studies and metallurgical test work

  • pre-development environmental baseline work and general permitting

  • announce maiden Ore Reserve

  • assess toll milling options, including cost and schedule availability

  • assess contract mining and financing options


With only 21% of the prospective corridors drilled, strong news flow is expected to continue as BC8 looks to rapidly build up its resource base. With a proven management team and in a prime location with nearby infrastructure, we expect to see a higher market cap as BC8 further progresses towards mine development. We maintain our Speculative Buy recommendation on BC8.

Disclosure Disclaimer


This Research Report expresses the personal view of the Author. DJ Carmichael Pty Limited, including authors of this report, its directors and employees advise that at the time of publication they hold or may become entitled to securities of the issued capital of the company and/or earn brokerage and other benefits or advantages, either directly or indirectly from client transactions in stocks mentioned in this report.

DJC acted as Lead Manager to a pre-IPO round of funding as well as the IPO for Black Cat Syndicate Ltd (BC8) in 2017/18 and a $2.5m Placement in April 2019, and it was paid fees for those services. Black Cat Syndicate Ltd (BC8) has engaged DJC to act as corporate adviser, and pays a fee for that service. DJC, its advisers and staff hold circa 2% of unrestricted Shares, circa 14% of restricted Shares and circa 18% of options (exercisable at $0.20 expiring 17 January 2023) on issue in Black Cat Syndicate Ltd (BC8), as at 15 May 2019.

The analyst does not hold securities in Black Cat Syndicate Limited.

DJ Carmichael Pty Ltd is a wholly owned subsidiary of DJ Carmichael Group Pty Ltd ACN 114 921 247. In accordance with Section 949A of the Corporations Act 2001 DJ Carmichael Pty Limited advises this document contains general financial advice only. In preparing this document DJ Carmichael Pty Limited did not take into account the investment objectives, financial situation and particular needs (‘financial circumstances’) of any particular person. Accordingly, before acting on any advice contained in this document, you should assess whether the advice is appropriate in light of your own financial circumstances or contact your DJ Carmichael Pty Limited adviser. DJ Carmichael Pty Limited, its Directors employees and advisers may earn brokerage or commission from any transactions undertaken on your behalf as a result of acting upon this information. The information contained herein relies on information obtained from third parties. While DJ Carmichael Pty Limited believes that the information herein is accurate, no warranty of accuracy or reliability is given in relation to any advice or information contained in this publication and no responsibility for any loss or damage whatsoever arising in any way for any representation, act or omission, whether express or implied (including responsibility to any persons by reason of negligence), is accepted by DJ Carmichael Pty Limited or any officer, agent or employee of DJ Carmichael Pty Limited. This document is intended only for the use of the individual or entity to which it is addressed and may contain information that is privileged, confidential and exempt from disclosure under applicable law. If you are not the intended recipient or employee or agent responsible for delivering the document to the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication and its attachments is strictly prohibited.

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Recommendation Definitions:

SPECULATIVE BUY – Potential 10% or more outperformance, high risk
BUY – Potential 10% or more outperformance
ACCUMULATE - 10% or more out-performance, buy on share price weakness
HOLD – Potential 10% underperformance to 10% over performance
SELL – Potential 10% or more underperformance

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