Westgold Acquires Karora in $808M Mining Merger
Westgold Resources has entered into a definitive agreement to acquire Karora Resources, with the combined company poised to become a mid-tier gold producer with a market capitalization of approximately A$2.2 billion. The transaction is structured as a statutory plan of arrangement under the Canada Business Corporations Act. Karora shareholders will receive a comprehensive offer for their shares, which includes 2.524 Westgold fully paid ordinary shares, A$0.68 in cash, and 0.30 of a share in a newly formed company, SpinCo, which will hold Karora's interests in lithium explorer Kali Metals and a 1% lithium royalty on certain mining interests.
The merger is expected to bolster the gold production capacity of the companies, targeting over 400,000 ounces of gold per year from a combined resource base. The acquisition price represents a 10.1% premium to Karora's closing share price and a 25.3% premium based on a 20-day volume-weighted average price for both companies. Upon completion, Westgold shareholders will own approximately 50.1% of the new entity, with Karora shareholders holding the remaining 49.9%. The combined company will focus on gold assets in Western Australia, including Karora's Beta Hunt and Higginsville operations, aiming to leverage operational synergies and growth opportunities.
