Dacian Gold has offered to acquire rival West Australian gold company NTM Gold in an all-stock deal.
The companies have entered into a binding scheme implementation deed (SID), under which each of the NTM Gold’s shareholders will be issued one Dacian Gold share for every 2.7 NTM Gold shares held.
NTM Gold is currently focussed on exploring in the Eastern Goldfields of Western Australia. It is pursuing the Redcliffe gold project, which is located 240km north of Kalgoorlie, and 40km northeast of a historic gold mining town called Leonora.
The Redcliffe project has a mineral resource estimate of 537.9koz of gold in the indicated as well as inferred categories.
On the other hand, Dacian Gold is a mid-tier gold producer through its Mt Morgans Gold Operations, located 20km west of Laverton in Victoria.
The proposed merger will make use of Dacian Gold’s operational expertise and processing infrastructure to exploit the development potential of the Redcliffe gold project via regional consolidation.
Redcliffe is located within a 100km radius of the Mt Morgans Gold Operations.
The enlarged company will have a highly prospective land position of more than 1,300km2 in the Leonora-Laverton district. Besides, it will have a significant organic growth pipeline consisting of advanced exploration targets and mineral resource growth opportunities.
Dacian Gold’s shareholders to own 68.4% stake in the merged entity
In the enlarged gold company, Dacian Gold’s shareholders will own a stake of 68.4%, while NTM Gold’s shareholders will hold the remaining 31.6% stake.
NTM Gold’s board has recommended the company’s shareholders to vote in favour of the scheme in the absence of a superior proposal. The company’s largest shareholders – Empire Resources Group (13.7%) and DGO Gold (13.6%) are backing the offer from Dacian Gold.
The enlarged gold company is estimated to have a market capitalisation of AUD285m ($207.6m) as of 30 September 2020.
NTM Gold managing director Andrew Muir said: “This is a compelling transaction for NTM and provides the financial, processing and operating strength to unlock the value of the Redcliffe Gold Project.
“The transaction is an outstanding opportunity for NTM given the proximity of both companies’ assets and delivers to NTM shareholders immediate exposure to gold production while still enabling them to benefit from future exploration success at both Redcliffe and Mt Morgans.”
