Westgold Resources Ltd (ASX:WGX) has completed a merger with Karora Resources Inc to create a mid-tier gold producer dually listed in Australia and the Toronto Stock Exchange (TSX) which is set to become one of Australia’s largest unhedged producers of the precious metal.
The merger was finalised after Westgold acquired all of the remaining shares in Karora through a statutory plan of arrangement under the Canada Business Corporations Act, with the deal now needing to being signed off on by the TSX.
Karora’s operations include the Beta Hunt Mine, the Higginsville Gold Operations and the Spargos Gold Mine, all set along the Norseman-Wiluna Greenstone Belt in Western Australia, and it will now join these with Westgold’s portfolio including the Murchison Operations, Meekatharra Gold Operations, Cue Gold Operations and Bryah Operations – all in the same state.
Westgold said the merger would therefore establish the new entity as a top five gold producer, yielding more than 400,000 ounces per year, and with a pro forma market capitalisation of A$2.5 billion.
Managing Director and CEO Wayne Bramwell said this development was a welcome one for the company.
“Today marks the next phase of Westgold’s evolution into a larger, unhedged and well-funded Australian gold producer,” he said.
“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 million) in corporate cost savings and A$209 million (C$189 million) in operating synergies.”
Westgold has been trading at $2.65.