Australian mining firms Horizon Minerals and Greenstone Resources have agreed to merge in an all-stock deal to create a new emerging gold producer in the Western Australian goldfields.
The merger of the two Australian Securities Exchange (ASX)-listed firms will be carried out by way of schemes of arrangement under the Corporations Act 2001 (Cth). According to the terms of the agreement, Horizon Minerals will acquire all of Greenstone Resources’s fully paid ordinary shares and listed options.
The shareholders of Greenstone Resources will be issued 0.2868 Horizon Minerals shares for each Greenstone Resources share held.
Besides, Greenstone Resources’ listed option holders will receive 0.2868 new Horizon Minerals listed options for every listed Greenstone Resources option held.
Horizon Minerals is a mid-tier gold producer with a portfolio of gold projects located in the core of the Western Australian goldfields. Greenstone Resources is a gold exploration and development company, which is focused mainly on developing the Burbanks gold project near Coolgardie in Western Australia.
Following the completion of their merger, the existing shareholders of Horizon Minerals and Greenstone Resources will own nearly 63.1% and 36.9%, respectively, of the new combined entity.
The combined company`s portfolio will have a global JORC mineral resource of about 1.8 million ounces and an exploration holding, concentrated in the Kalgoorlie and Coolgardie gold mining hubs.
Horizon Minerals CEO Grant Haywood said: “We believe this proposed merger represents a unique opportunity to build our resource base in the WA Goldfields with higher grade deposits near established mining and processing infrastructure.
“This really is a logical consolidation of complementary assets which creates greater potential for Horizon to unlock the value within our longer project pipeline.”
In line with the merger, Horizon Minerals and Greenstone Resources have signed a secured loan agreement.
Under the loan agreement, Horizon Minerals will provide an A$450,000 ($293,445) facility to Greenstone Resources to help the latter with costs associated with the merger and payment of other liabilities due during the implementation of the transaction.
Greenstone Resources managing director and CEO Chris Hansen said: “Together we have greater capability to deliver on near-term cashflow generation which provides a stepping stone to delivering a longer-life, cornerstone operations fitting for an emerging mid-tier producer.
“Through the combination of our teams, we are also able to bring all the necessary skillsets at a Board and senior management level which will enable us to achieve our ambitions.”
Subject to various customary conditions, the transaction is anticipated to be completed in June 2024.
Argonaut PCF is serving as Horizon Minerals’s financial adviser, while Allen & Overy is providing legal counsel for the firm concerning the schemes. Greenstone Resources is represented by Steinepreis Paganin as its legal adviser for the schemes.
