Westgold Karora Merger Information
Merger to Create +400 kozpa1 Australian Gold Miner – Fully Leveraged to the Gold Price
Transaction Highlights:
- Westgold Resources Limited (ASX: WGX, OTCQX: WGXRF – “Westgold”) and Karora Resources Inc. (TSX: KRR, OTCQX: KRRGF – “Karora”) have agreed to combine in a merger pursuant to which Westgold will acquire 100% of the issued and outstanding common shares of Karora by way of a statutory plan of arrangement under the Canada Business Corporations Act (“Transaction”).
- The Transaction represents a transformational step change in growth for both Westgold and Karora shareholders:
- Creates a globally investable, mid-tier gold producer operating exclusively in Western Australia with a highly complementary combination of mining and processing assets, people and balance sheet;
- Top 5 largest, ASX listed Australian gold producer based on the pro forma market capitalisation with combined Ore Reserves of 3.2Moz2 and Mineral Resources of 13Moz3;
- One of the largest unhedged Australian gold producers on completion of the Transaction providing investors with full exposure to the gold price4;
- Combined pipeline of advanced organic growth options and exploration targets across Karora’s Beta Hunt and Higginsville properties and Westgold’s Murchison and Bryah properties;
- Estimated operating synergies5 of A$209 million (C$187 million6) and estimated corporate savings7 of A$281 million (C$251 million6);
- Robust balance sheet with financial resources of circa A$160 million (C$143 million6) in cash and liquidity through Westgold’s existing corporate revolver facility (subject to requisite consents) and following full repayment of Karora’s existing A$44 million (C$39 million6) revolving facility to support an accelerated resource development program at the Beta Hunt Fletcher Zone and Bluebird-South Junction;
- Enhanced capital markets profile with increased scale, trading liquidity and quality to be attractive to both gold and generalist investors across ASX, TSX and OTCQX;
- Significant re-rating potential via increased scale and increased index weighting, such as the GDX and GDXJ indices; and
- Combined board of directors comprising experienced mining professionals with a proven track record of maximising value for shareholders.
"This merger brings Beta Hunt together with Big Bell, the emerging Bluebird and the iconic Great Fingall mine under one Australian management team. These assets combined create the foundations of a new Australian gold mining powerhouse."
- Wayne Bramwell, Westgold Managing Director and CEO
