NuStar lines up for Intrepid (December 14, 2005)

Australian gold producer NuStar Mining (NMC-A) will gain an exploration arm and a Canadian listing through a merger with Toronto-based explorer Intrepid Minerals (IAU-T).

The two companies will combine in a deal that gives NuStar shareholders about 63% and Intrepid shareholders 37% of the combined company, which will have about 80,000 oz. gold production in 2006 and an expanding production profile in the following two years.

The deal calls for NuStar to consolidate its shares at 12-to-1, and for Intrepid shares to be exchanged one-for-one. The new company, to be called Intrepid Mines, would have four board members from each of its predecessors. Intrepid’s Laurence Curtis will be president; NuStar will contribute chairman Colin Jackson and chief operating officer Brett Lambert.

NuStar, based in Perth, has the Paulsens underground gold mine in Western Australia as its principal asset. Paulsens is slated to produce 80,000 oz. gold this year and has a reserve of 1.2 million tonnes grading 10.7 grams gold per tonne.

Intrepid brings in its portfolio of exploration projects, chiefly in Argentina and El Salvador but including some grass-roots properties in Canada. The most advanced project is Casposo, in Argentina’s San Juan province, where exploration by Intrepid and earlier operators has outlined an indicated resource of 1.9 million tonnes grading 5 grams gold and 127 grams silver per tonne, plus an inferred resource of 439,000 tonnes running 1.9 grams gold and 91 grams silver.