Ramelius Resources, a Western Australian gold producer, has agreed to acquire all remaining shares in smaller peer Spartan Resources through a binding Transaction Implementation Deed.
The proposed acquisition, valued at approximately A$2.4bn ($1.5bn), will be executed via a scheme of arrangement under Part 5.1 of the Corporations Act 2001 (Cth). Under the terms, Spartan shareholders will receive A$0.25 in cash and 0.6957 new Ramelius shares for each Spartan share.
If the scheme does not proceed, a conditional off-market takeover offer will be made on the same terms.
Ramelius currently owns 19.9% stake in Spartan.
The transaction is expected to result in Spartan shareholders owning 39.5% of the enlarged entity. The remaining stake will be with Ramelius.
The Spartan Board has unanimously recommended shareholders to support the transaction, contingent on the absence of a superior proposal and a favourable independent expert assessment.
Upon successful completion of the merger, Spartan executive chairman Simon Lawson will join the Ramelius Board as non-executive deputy chair.
The merger is poised to create a leading Australian gold producer, with a combined mineral resource estimate of 12.1Moz Au and ore reserve of 2.6Moz Au. The new entity aims to significantly increase its production capacity to over 500,000 ounces by the fiscal year 2030.
The combined strengths of Ramelius and Spartan’s assets, including the Mt Magnet and Dalgaranga projects, are expected to yield considerable synergies. The merger will enhance the market position of the new entity and create a gold producer with a pro-forma market capitalisation of A$4.2bn.
The robust pro-forma net cash position of over A$500m further underlines the financial stability of the combined group post-merger.
Ramelius managing director Mark Zeptner said: “Ramelius is delighted to be combining with Spartan, which will see Ramelius’ Mt Magnet Production Hub supercharged by the integration of Spartan’s high-grade Dalgaranga Mineral Resource. The combination will see Mt Magnet deliver higher ounces, at higher grade, with higher margins. With the Spartan Effect, Ramelius has a vision for the Combined Group to be a +500koz/pa producer in FY30.
“In addition to the incredible production potential combining these two companies delivers, we are also excited to see what the ongoing exploration efforts at Dalgaranga can deliver for the benefit of the Combined Group’s shareholders.”
Besides shareholders’ approval, the completion of the deal is subject to other customary conditions including regulatory approvals.
