Street Talk understands the $71 million Brightstar Resources and...

Street Talk understands the $71 million Brightstar Resources and the $24 million Alto Metals are set to merge in an all-scrip deal. The shares will be exchanged on a one-for-four basis, giving Brightstar a circa 66.6 per cent ownership of the combined entity.

In parallel with the merger, the new combined entity will seek to raise about $20 million from investors via brokers Canaccord Genuity and Argonaut.

Alto’s Sandstone project sits on 900 square kilometres in Western Australia, which it says has been producing gold since the 19th century. It is next door to Westgold’s Big Bell mine and Ramelius’ Mount Magnet. The ASX-listed minnow had long been seen as a takeover target – the now $1.2 billion Westgold Resources had a circa 14 per cent stake at one point, while China’s Shandong Goldsea Group Co tabled a bid in 2020.

Brightstar, for its part, is led by Alex Rovira, who was previously a banker at Canaccord Genuity.