Westgold Resources (ASX:WGX) has completed a merger with Karora Resources (TSX:KRR), creating a mid-tier gold producer and international gold company.
The company will be dual listed on the ASX and TSX, and have a pro-forma market capitalisation of $2.5 billion.
Westgold, which has a market capitalisation of $1.25 billion, says this merger has created one of the “largest” unhedged Australian gold producers and provides an enhanced capital markets profile.
CEO Wayne Bramwell says the company’s value proposition has been enhanced with an expanded team, quality operating assets, and a pipeline of exploration prospects across two goldfields.
“The merger with Karora upsizes our Western Australian operating platforms — an extensive and established asset base that can be increasingly leveraged for free cash generation and growth,” Bramwell says.
“Westgold commences this new growth phase with a robust balance sheet and a plan focused on realising a potential $281 million in corporate cost savings and $109 million in operating synergies.”
Under the transaction, Westgold engaged Argonaut as the financial advisor, Thomson Geer as Australian legal advisor, and Stikeman Elliott as Canadian legal advisor, to acquire all shares in Karora.
For each share held, Westgold offered Karora shareholders 2.524 shares, $0.68 in cash, and 0.3 of a share in a new company to demerge from Karora.
Karora CEO Paul Huet says the growth of the company from a single mine with no mill to a multi-mine producer with two processing facilities has led the company along an upward trajectory for almost six years.
“The combination of Karora and Westgold to create a new Westgold is a transformative step that will ensure growth continues as an unhedged gold producer in a historically robust gold market.
“The timing couldn’t be better in my opinion.”
Subject to securing final approval of the TSX, the company plans to advance greenfield and brownfield targets, as well as several exploration prospects across Australia’s goldfields region.
Westgold Resources is a Western Australian-focused gold producer with assets in the Murchison and Bryah regions. The company has more than 1,300km2 of tenure and operates four underground mines.
The company is exhibiting at the Diggers & Dealers Mining Forum, which is being held in Kalgoorlie, Western Australia from 5-7 August.
Mining.com.au will also be attending this year’s forum.
Write to Aaliyah Rogan at Mining.com.au
Images: Karora Resources
