As part of Superhero’s Gold Series, we’re profiling the asset of gold, the different ways to invest in it as well as the people who dig it up; today that’s Black Cat Syndicate.
What is Black Cat Syndicate?
Trading under the ticker BC8, Black Cat Syndicate is an Australian gold explorer and soon to be gold miner.
Operating out of Kalgoorlie, the small operation started out with just “a postage stamp” worth of land to explore in 2017.
Since then Black Cat has majorly expanded, with its Kal East Project covering more than 750 square kilometres of highly prospective land with shallow deposits of high-grade gold identified.
More recently though, it has made two significant acquisitions from major gold miner Northern Star (ASX:NST) as part of a $39.5 million deal.
Those projects, named ‘Coyote’ and ‘Paulsens’, are of huge potential to Black Cat, managing director Gareth Solly told Superhero.
“These are transformational for us. These two deals come with infrastructure and high grade resources and they allow us to become a multi-operation producer in the future,” Solly said.
“We’re super excited to get in and start producing from [those].”
Paulsens previously helped to take Northern Star from a junior explorer to the $10 billion miner it is today. Black Cat Syndicate is hoping to continue that good run.
“The way we think of it is you sequentially restart them with lower capital outlay. Once they’re in cash flow that’ll allow us to go back to our 1.3 million ounce resource at Kal East and get that into construction.”
Why buy an old project?
While acquiring an older site from a rival might sound counterintuitive, it’s actually incredibly common in the gold sector.
Rather than only selling off subpar or used up mines, producers can often pass on good projects that they themselves have simply outgrown. In other words, at Northern Star’s current size it needs to focus on bigger projects.
“It’s an entry point for us and all going well we’ll follow in the same sequence,” Solly explains.
Indeed this is how many gold miners got their start, including giants like Evolution and Silver Lake Resources.
It’s no surprise that the strategy behind Black Cat Syndicate has been laid out by the very people who have pulled it off before. Solly, chairman Paul Chapman, and director Les Davis all spent time at Silver Lake.
What should investors look for in a gold project?
More generally, he says good gold miners have a few key ingredients.
Firstly, you’re looking for a quality well-rounded board that has all the necessary engineering, mining, finance and legal expertise. While what’s underground matters, so too does the management team above it.
“Then of course there’s the quality of the ground itself,” Solly said. “The old adage is grade is king.”
Finally, a miner needs the necessary infrastructure to develop its project and get the gold out of the ground and ultimately into the market.
Superhero does not provide financial advice that considers your personal objectives, financial situation or particular needs. All investments carry risk so please consider carefully before investing. Past performance is not indicative of future performance. Pictures, graphics, charts and graphs are provided for illustrative purposes only.
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