Westgold Resources and Karora Resources have completed their merger, establishing a new mid-tier gold production company.
The newly combined company, which has a market capitalisation of around $1.43bn, plans to have a dual listing on the Australian Securities Exchange (ASX) and Toronto Stock Exchange (TSX).
The definitive arrangement agreement between the companies was signed in April 2024.
As per the deal, Westgold acquired all shares of Karora Resources.
Under the arrangement, Westgold offered Karora shareholders a multifaceted consideration for each share held.
This includes 2.524 Westgold shares, C$0.608 in cash and a 0.30 share in Culico Metals, a spin-off entity from Karora.
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By GlobalData
Culico’s holdings include a 1% lithium royalty and rights to a deferred payment from the sale of the Dumont asset, alongside A$10.9m in cash.
Culico’s financial position is bolstered by A$5.36m received from Karora, equating to the value of Karora’s 22.1% stake in Kali Metals.
Due to regulatory constraints, Westgold has retained Karora’s 22.1% stake and compensated Culico with a cash equivalent.
Westgold managing director and CEO Wayne Bramwell said: “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 focused on realising a potential A$281m (C$254m ) in corporate cost savings and A$209m in operating synergies.
“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.”
Karora chairman and CEO Paul Huet said: “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.”
