Australia-based gold producer Pantoro will acquire Tulla Resources in a move to take full ownership of the producing Norseman gold project in the Eastern Goldfields of Western Australia.
In this connection, the parties have entered into a binding merger implementation deed.
Currently, Pantoro holds 50% ownership in the gold project with the stake acquired from Tulla Resources in 2019.
As per the terms of the all scrip merger, Tulla Resources’ shareholders would exchange each of their shares for 4.96 of Pantoro’s shares. The exchange ratio represents a 24.7% premium to the last closing price of Tulla Resources’ shares.
The acquisition of Tulla Resources will also enable Pantoro to consolidate full ownership of the Norseman battery and base metals mineral rights.
According to the parties, the combined entity will have a target production of 110,000 ounces per annum, with a mineral resource of 4.79 million ounces and an ore reserve of 0.98 million ounces.
Pantoro has also announced the launch of a two-tranche institutional placement to raise A$75m ($52m) in line with the acquisition.
The proceeds from the placement along with existing cash will fund the final stages of ramp-up of the Norseman project, and support the investment in exploration and ore reserve growth, said the company.
Pantoro managing director Paul Cmrlec said: “Consolidating the Norseman gold project into a single entity is a logical step for all parties to maximise value as the project ramps up to reach its full potential as a premier gold asset in Western Australia.
“While Norseman has experienced delays and challenges in its ramp-up, key operational and management changes made late in 2022 are now yielding positive results, with productivity and throughput increasing month on month and process plant ramp-up now virtually complete to nameplate capacity.”
Boards of both firms have recommended the merger unanimously in the absence of a superior proposal.
The first gold pour at the Norseman gold project was achieved by the companies in October 2022.
