Karora Resources (TSX: KRR)
Westgold Resources Limited (ASX: WGX) and Karora Resources announced the completion of the merger of Westgold and Karora to create a leading mid-tier gold producer and international gold company expected to be dual listed on the ASX and TSX.
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| Karora Resources |
TSX: KRR |
| Stage |
Production + Development + Exploration |
| Metals |
Gold + Nickel |
| Market cap |
C$1.23 Billion @ C$6.89 |
| Location |
Kalgoorlie, Western Australia |
| Website |
karoraresources.com |
WESTGOLD AND KARORA COMPLETE MERGER
TORONTO and PERTH, Australia,Aug. 1, 2024/CNW/ – Westgold Resources Limited (ASX: WGX; OTCQX: WGXRF–Westgoldor theCompany) and Karora Resources Inc. (TSX: KRR; OTCQX: KRRGF–Karora) are pleased to announce the completion of the merger of Westgold and Karora to create a leading mid-tier gold producer and international gold company expected to be dual listed on the Australian Securities Exchange (ASX) and Toronto Stock Exchange (TSX).
Westgold has acquired 100% of the issued and outstanding shares of Karora (Karora Shares) by way of a statutory plan of arrangement under the Canada Business Corporations Act (theArrangement). The merger creates a larger, more diversified and, subject to the final approval of the TSX, dual listed gold company, which
WESTGOLD AND KARORA COMPLETE MERGER – Highlights
- is globally investable– a mid-tier gold producer operating exclusively inWestern Australiawith a highly complementary combination of mining and processing assets, people, and a robust balance sheet;
- establishes a top five Australian gold producer (+400,000 ozpa)– with a pro forma market capitalisation of A$2.5 billion(C$2.3 billion1);
- becomes one of the largest unhedged Australian gold producers– providing investors with full exposure to the gold price;
- starts day one with an enviable pipeline of organic opportunities– including advanced greenfield, brownfield targets and exploration prospects across two of Australia’smost prolific gold fields;
- provides enhanced capital markets profile– with increased scale, trading liquidity, and potential index inclusion for gold and generalist investors across ASX, TSX and OTCQX; and
- is led by a highly experienced management team– supported by a combined board of accomplished mining professionals with a proven track record of maximising value for shareholders.
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Westgold Managing Director and CEO Wayne Bramwell said:
“Today marks the next phase of Westgold’s evolution into a larger, unhedged and well-funded Australian gold producer.
“Our value proposition is significantly enhanced with an expanded team, quality operating assets and an enviable pipeline of exploration prospects across two of Australia’s most productive gold fields.
“The merger with Karora upsizes our Western Australian operating platform – an extensive and established asset base that can be increasingly leveraged for free cash generation and growth.
“Westgold commences this new growth phase with a robust balance sheet and a plan focussed on realising a potential A$281 million(C$254 million2) in corporate cost savings and A$209 million(C$189 million2) in operating synergies.
“I am proud to officially welcome our new shareholders and the Karora team to Westgold.
“Together, as a combined entity, we are positioned to become a leading global mid-tier gold producer focused on building a long term and sustainable business that consistently delivers value to our shareholders.”
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Karora Chairman and CEO Paul Huet said:
“I am excited for the next chapter in what has been a terrific journey for our shareholders and the Karora team.
“The growth of the company from a single mine with no mill to a multi-mine producer with two processing facilities has led us along an upward trajectory for nearly 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.
“I wish to thank all our shareholders and the entire Karora team for their support and efforts along the way. I look forward to the continued success as we join Westgold to create a stronger future for all our stakeholders.”
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Overview
Under the terms of the Arrangement, each former shareholder of Karora (a Karora Shareholder) is entitled to receive 2.524 Westgold fully paid ordinary shares (Westgold Shares), C$0.608( A$0.6732) in cash, and 0.30 of a share of Culico Metals Inc. (Culico), a new company “spun out” from Karora, for each Karora Share held immediately prior to the effective time of the Arrangement (the Consideration).
Culico’s assets comprise a 1% lithium royalty on certain mining interests held by Kali Metals Limited, the right to receive a deferred consideration payment due to Karora relating to the on-sale of the Dumont asset andA$10.9 million (C$9.8 million3) in cash.
On closing of the Arrangement, Culico is 100% owned by former Karora Shareholders.
The cash amount received by Culico from Karora includes A$5.360 million (C$4.840 million3), representing the negotiated economically equivalent value of Karora’s existing 22.1% interest in Kali Metals Limited. Due to regulatory restrictions on transfer, Westgold has retained Karora’s original 22.1% interest in Kali Metals Limited on completion of the Arrangement and paid the cash equivalent value to Culico in lieu of such interest.
The Westgold Shares are listed for trading on the ASX and, subject to final approval of the TSX, will commence trading on the TSX under the ticker symbol WGX at market open on 6 August 2024.
Karora has applied to de-list the Karora Shares from the TSX, and delisting is expected to be effective at market close on 2 August 2024.
Following the delisting of Karora, Westgold intends to apply for Karora to cease to be a reporting issuer under applicable Canadian securities laws.
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The live Spot gold price can be found HERE
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Disclosure
At the time of writing the author holds shares in Karora Resources.
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