Westgold Resources and Karora Resources have agreed to merge via a plan of arrangement. The combined company will have a portfolio of Western Australian assets capable of producing 400,000-plus ounces annually.
The announcement follows recent news that Australian gold miner Ramelius Resources had ended discussions to purchase Canadian-based, Western Australia-focused Karora.
Under the merger terms, Karora shareholders will receive 2.524 Westgold shares, with A$0.68 in cash and 0.30 of a share in the new company to be spun off from Karora. After the transaction is completed, Westgold shareholders will own 50.1% of the new company and former Karora shareholders will own the rest.
“Karora shareholders will benefit from having very meaningful ownership in a larger, more diversified gold producer with a highly experienced management team located entirely in Western Australia,” said Karora Chairman and CEO Paul Huet.
The new company will have a market capitalisation of approximately $2.2 billion.
“This merger brings Beta Hunt together with Big Bell, the emerging Bluebird and the iconic Great Fingall mine under one Australian management team,” said Westgold Managing Director and CEO Wayne Bramwell.
“These assets combined create the foundations of a new Australian gold mining powerhouse that is focused on free cash generation, is internationally relevant and investable, and can stand head and shoulders alongside the biggest names in the Australian gold sector.”
Westgold is the dominant gold miner in the Murchison and Bryah regions of Western Australia and uniquely an owner-operator of five underground mines. Karora is focused on increasing gold production at its integrated Beta Hunt gold mine with beneficial nickel by-product production and Higginsville gold operations in Western Australia.
Source: Westgold Resources