Published: April 19, 2024 |

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Australia’s Westgold Resources said on Monday it had agreed to acquire Toronto-listed Karora Resources in a cash-and-stock deal worth about A$1.23 billion ($808.36 million), seeking its gold assets in Western Australia.

The deal will propel the combined group to become a mid-tier gold miner producing around 400,000 troy ounces of gold a year in the state and with a market capitalization of around A$2.2 billion.

Karora shareholders will receive 2.524 Westgold shares, with A$0.68 in cash and 0.30 of a share in a new company to be spun off from Karora, which will include its shareholding in lithium explorer Kali Metals and a 1 percent lithium royalty on certain mining interests.

The deal implies an offer price of A$6.60 per Karora share, or C$5.90 a share, based on Westgold’s last closing price and the Australian dollar to Canadian dollar exchange rate on April 5, representing a 10.1 percent premium to Karora’s closing share price.

Karora Resources is focused on increasing gold production at its Beta Hunt gold mine and Higginsville gold operations in Western Australia and earlier ended buyout talks with another Australian gold miner, Ramelius Resources.

“The prize here is Beta Hunt’s gold potential. Rarely do you find a gold asset of the quality and potential of Beta Hunt hiding in a nickel belt and drilling is expected to further unlock value at this mine,” said Westgold CEO Wayne Bramwell.

Upon completion of the deal, Westgold shareholders will own 50.1 percent of the combined company.

Karora Chairman and CEO Paul Huet said the transaction could yield an estimated A$490 million in corporate and operational savings and offered a “compelling opportunity” with gold prices at a record high.

He highlighted that Karora shareholders would become “proud owners of the largest unhedged gold producer in Australia at completion of the transaction”, and stood to gain from the stronger balance sheet and more exploration opportunities.

Source: Reuters

Westgold Resources Limited is an innovative and progressive West Australian gold producer located in the Murchison and Bryah regions of WA. The company has tenure of more than 1,300 km and operates four underground mines and three processing plants with an installed processing capacity of approximately four million tonnes per annum. Operating on a ‘hub and spoke’ model, Westgold’s Murchison mines feed ore to its Meekatharra and Tuckabianna processing hubs and its Bryah Basin mines send ore to the Fortnum hub.

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