TORONTO and PERTH,
Australia, Aug. 1, 2024 /CNW/ - Westgold Resources
Limited (ASX: WGX; OTCQX: WGXRF – Westgold or the
Company) and Karora Resources Inc. (TSX: KRR; OTCQX:
KRRGF – Karora) are pleased to announce the completion
of the merger of Westgold and Karora to create a leading mid-tier
gold producer and international gold company expected to be dual
listed on the Australian Securities Exchange (ASX) and
Toronto Stock Exchange (TSX).
Westgold has acquired 100% of the issued and outstanding shares
of Karora (Karora Shares) by way of a statutory plan of
arrangement under the Canada Business Corporations Act (the
Arrangement). The merger creates a larger, more diversified
and, subject to the final approval of the TSX, dual listed gold
company, which:
- is globally investable – a mid-tier gold producer
operating exclusively in Western
Australia with a highly complementary combination of mining
and processing assets, people, and a robust balance sheet;
- establishes a top five Australian gold producer (+400,000
ozpa) – with a pro forma market capitalisation of A$2.5 billion (C$2.3
billion1);
- becomes one of the largest unhedged Australian gold
producers – providing investors with full exposure to the gold
price;
- starts day one with an enviable pipeline of organic
opportunities – including advanced greenfield, brownfield
targets and exploration prospects across two of Australia's most prolific gold fields;
- provides enhanced capital markets profile – with
increased scale, trading liquidity, and potential index inclusion
for gold and generalist investors across ASX, TSX and OTCQX;
and
- is led by a highly experienced management team –
supported by a combined board of accomplished mining professionals
with a proven track record of maximising value for
shareholders.
Westgold Managing Director and CEO Wayne Bramwell said:
"Today marks the next phase of Westgold's evolution into a
larger, unhedged and well-funded Australian gold producer. Our
value proposition is significantly enhanced with an expanded team,
quality operating assets and an enviable pipeline of exploration
prospects across two of Australia's most productive gold fields.
The merger with Karora upsizes our Western Australian operating
platform - an extensive and established asset base that can be
increasingly leveraged for free cash generation and growth.
Westgold commences this new growth phase with a robust balance
sheet and a plan focussed on realising a potential A$281 million (C$254
million2) in corporate cost savings and
A$209 million (C$189 million2) in operating
synergies.
I am proud to officially welcome our new shareholders and the
Karora team to Westgold. Together, as a combined entity, we are
positioned to become a leading global mid-tier gold producer
focused on building a long term and sustainable business that
consistently delivers value to our shareholders."
Karora Chairman and CEO Paul
Huet said:
"I am excited for the next chapter in what has been a terrific
journey for our shareholders and the Karora team. The growth of the
company from a single mine with no mill to a multi-mine producer
with two processing facilities has led us along an upward
trajectory for nearly six years. The combination of Karora and
Westgold to create a new Westgold is a transformative step that
will ensure growth continues as an unhedged gold producer in a
historically robust gold market.
The timing couldn't be better in my opinion.
I wish to thank all our shareholders and the entire Karora team
for their support and efforts along the way. I look forward to the
continued success as we join Westgold to create a stronger future
for all our stakeholders."
Overview
Under the terms of the Arrangement, each former shareholder of
Karora (a Karora Shareholder) is entitled to receive 2.524
Westgold fully paid ordinary shares (Westgold Shares),
C$0.608 (A$0.6732) in cash and 0.30 of a share
of Culico Metals Inc. (Culico), a new company "spun out"
from Karora, for each Karora Share held immediately prior to the
effective time of the Arrangement (the Consideration).
Culico's assets comprise a 1% lithium royalty on certain mining
interests held by Kali Metals Limited, the right to receive a
deferred consideration payment due to Karora relating to the
on-sale of the Dumont asset and A$10.9
million (C$9.8
million3) in cash. On closing of the Arrangement,
Culico is 100% owned by former Karora Shareholders.
The cash amount received by Culico from Karora includes
A$5.360 million (C$4.840 million3), representing the
negotiated economically equivalent value of Karora's existing 22.1%
interest in Kali Metals Limited. Due to regulatory restrictions on
transfer, Westgold has retained Karora's original 22.1% interest in
Kali Metals Limited on completion of the Arrangement and paid the
cash equivalent value to Culico in lieu of such interest.
The Westgold Shares are listed for trading on the ASX and,
subject to final approval of the TSX, will commence trading on the
TSX under the ticker symbol WGX at market open on 6 August 2024. Karora has applied to de-list
the Karora Shares from the TSX, and delisting is expected to be
effective at market close on 2 August
2024. Following the delisting of Karora, Westgold
intends to apply for Karora to cease to be a reporting issuer under
applicable Canadian securities laws.
Culico has applied to list its common shares on the TSX Venture
Exchange (TSXV) through the TSXV Sandbox, an initiative
intended to facilitate listing applications that may not satisfy
all requirements and guidelines of the TSXV, but due to facts or
situations unique to a particular issuer otherwise warrant a
listing on the TSXV. Listing will be subject to Culico receiving
conditional and final approval of the TSXV and satisfying all of
the listing requirements imposed by the TSXV. Culico intends to
provide further updates in due course; however, no assurances can
be provided that the Culico common shares will be listed on the
TSXV or any other stock exchange or, if listed on the TSXV, that
Culico will satisfy the specific listing conditions that the TSXV
will impose on Culico pursuant to the TSXV Sandbox.
All registered Karora Shareholders are encouraged to complete,
sign and return the letter of transmittal, which has been
previously mailed and is available under Karora's SEDAR+ profile at
www.sedarplus.ca, with accompanying Karora Share certificate and/or
DRS advice-statement(s) (if applicable) to Computershare Investor
Services Inc. as soon as possible, if they have not already done
so. Non-registered Karora Shareholders are encouraged to contact
their broker or other intermediary for instructions and assistance
in receiving the Consideration.
For more information on the Arrangement, see Karora's management
information circular dated 17 June
2024, filed under Karora's profile on SEDAR+ at
www.sedarplus.ca on 21 June 2024.
Westgold Board
Westgold Chair the Hon. Cheryl Edwardes
AM will continue in her role, as will the other members of
the incumbent Westgold Board, including Westgold Managing Director
and CEO, Wayne Bramwell. In
connection with the Arrangement, Karora Managing Director,
Australia, Leigh Junk, and
Karora Director Shirley In't Veld have been appointed to Westgold's
Board. Karora's Chair and CEO, Paul
Huet, will continue with Westgold in a special advisory role
to the Westgold Board for six months, subject to contract
finalisation.
Leigh Junk brings over 30 years
of mining industry experience, including executive management and
operations roles, and joined Karora in March
2023. Before this, he was Managing Director of Dacian Gold
prior to its takeover by Genesis Minerals in 2022 and, prior to
that, was Managing Director of Doray Minerals until its merger with
Silver Lake Resources in 2019. Leigh was a co-founder of Donegal
Resources, a private company that successfully acquired and
recommissioned several Nickel operations in the Kambalda,
Western Australia area, until it
was sold to Canadian miner Brilliant Mining Corp. In 2006, Leigh
has been a Director of several public companies in the mining and
financial sectors in both Australia and Canada.
Shirley In't Veld has over 30 years of career experience in
mining, renewables and energy sectors. She is currently a Director
of Alumina Limited and Develop Global Ltd. She was formerly Deputy
Chair of CSIRO (Commonwealth Science and Industrial Research
Organisation), Director of NBN Co. Limited (National Broadband
Network Co.), Northern Star Resources Limited, Perth Airport, DUET
Group, Asciano Limited and Alcoa of Australia Limited and a Council
Member of the Chamber of Commerce and Industry of Western Australia. She was also the Managing
Director of Verve Energy (2007 - 2012) and, previously, served in
senior roles at Alcoa of Australia Limited, WMC Resources Ltd.,
Bond Corporation and BankWest Perth. Shirley is also a past Chair
of the Queensland Government Expert Electricity Panel and a member
of the Renewable Energy Target Review Panel for the Australian
Department of Prime Minister and Cabinet. She also served as a
member of the COAG Energy Council Selection Panel, a Council member
of the Australian Institute of Company Directors (Western Australia) and the SMART
Infrastructure Facility (University of Wollongong).
Reporting Issuer Status and Filing of Technical
Reports
On completion of the Arrangement, Westgold became a reporting
issuer in Canada in the provinces
of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New
Brunswick, Nova Scotia,
Prince Edward Island and
Newfoundland and Labrador. Accordingly, Westgold intends to
file the following technical reports, each prepared in accordance
with National Instrument 43-101 - Standards of Disclosure for
Mineral Projects (NI 43-101), on SEDAR+ under its new
issuer profile, accessible at www.sedarplus.ca:
- the technical report entitled "NI 43-101 Technical Report,
Fortnum Gold Operations, Bryah Goldfield, Western Australia" dated as of
31 May 2024 (with an effective date
of 30 June 2023) prepared, reviewed
and approved by Jake Russell and
Leigh Devlin, each of whom is a
"qualified person" for purposes of NI 43-101, for Westgold;
- the technical report entitled "NI 43-101 Technical Report,
Meekatharra Gold Operations, Murchison
Goldfields, Western
Australia" dated as of 31May 2024 (with an effective
date of 30 June 2023) prepared,
reviewed and approved by Jake
Russell and Leigh Devlin,
each of whom is a "qualified person" for purposes of NI 43-101, for
Westgold;
- the technical report entitled "NI 43-101 Technical Report,
Cue Gold Operations, Murchison
Goldfields, Western
Australia" dated as of 31 May
2024 (with an effective date of 30
June 2023) prepared, reviewed and approved by Jake Russell and Leigh
Devlin, each of whom is a "qualified person" for purposes of
NI 43-101, for Westgold;
- the technical report entitled "NI 43-101 Technical Report,
Lakewood Operation, Eastern Goldfields, Western Australia" dated as of
4 January 2024 (with an effective
date of 30 September 2023) prepared,
reviewed and approved by Stephen
Devlin, Peter Ganza and Ian
Glacken, each of whom is a "qualified person" for purposes
of NI 43-101, for Karora; and
- the technical report entitled "NI 43-101 Technical Report,
Beta Hunt Operation, Eastern Goldfields, Western Australia" dated as of
2 January 2024 (with an effective
date of 30 September 2023) prepared,
reviewed and approved by Stephen
Devlin, Peter Ganza and Graham de la
Mare, each of whom is a "qualified person" for purposes of
NI 43-101, for Karora.
Advisors
In connection with the Arrangement, Westgold engaged Argonaut
PCF as financial advisor, Thomson Geer as Australian legal advisor
and Stikeman Elliott LLP as Canadian legal advisor.
Karora engaged Cormark Securities Inc., CIBC
World Markets Inc., Desjardins Capital Markets and Haywood
Securities Inc. as advisors, HopgoodGanim as Australian legal
advisor and Bennett Jones LLP as Canadian legal advisor to the
Transaction.
Forward looking statements
This document contains "forward-looking information" and
"forward-looking statements" which are based on the assumptions,
estimates, analysis and opinions of management made in light of its
experience and its perception of trends, current conditions and
expected developments, as well as other factors that management of
Westgold believes to be relevant and reasonable in the
circumstances at the date that such statements are made, but which
may prove to be incorrect or the actual results of which may vary
or differ materially. Forward-looking statements include statements
that are predictive in nature, depend upon or refer to future
events or conditions, or include words such as 'expects',
'anticipates', 'plans', 'believes', 'estimates', 'seeks',
'intends', 'targets', 'projects', 'forecasts', or negative versions
thereof and other similar expressions, or future or conditional
verbs such as 'may', 'will', 'should', 'would' and 'could'.
Forward-looking information contained herein includes, but is not
limited to: the strengths, characteristics and potential of
Westgold following completion of the Arrangement, including the
achievement of any contemplated corporate cost savings and
operating synergies; discussion of future plans, projects,
objectives, estimates and forecasts and the timing related thereto;
the timing of the listing of the Westgold Shares on the TSX and the
delisting of the Karora Shares from the TSX; the timing and
acceptance of the listing of the Culico common shares on the TSXV;
the timing and acceptance of an application for Karora ceasing to
be a reporting issuer in Canada;
and the size and composition of the Westgold Board and the
engagement of Mr. Huet as a special advisor thereto. Readers are
cautioned that the foregoing list and other information contained
herein is not exhaustive of all factors and assumptions which may
have been used by Westgold. Although management believes that the
assumptions made by Westgold and the expectations represented by
such information are reasonable, there can be no assurance that the
forward-looking information will prove to be accurate.
Forward-looking information involves known and unknown risks,
uncertainties, and other factors which may cause the actual
results, performance or achievements of Westgold or the combined
entity to be materially different from any anticipated future
results, performance or achievements expressed or implied by such
forward-looking information. Such factors include, among others,
the actual market price of gold, the actual results of current
exploration, the actual results of future exploration, changes in
project parameters as plans continue to be evaluated, changes in
laws, regulations and practices, the geopolitical, economic,
permitting, final approval of the TSX and legal climate that
Westgold operates in. Westgold believes that the assumptions and
expectations reflected in the forward-looking information are
reasonable. Readers should not place undue reliance on
forward-looking information. Westgold does not undertake to update
any forward-looking information, except in accordance with
applicable securities laws.
This document includes information that has been prepared by
third parties, and views based on information that has been
prepared by third parties. No representation or warranty is made as
to the accuracy, completeness or reliability of the information.
This document should not be relied upon as a recommendation or
forecast by Westgold.
1 Based on AUD:CAD of 0.9030 as at close 31 July 2024. Data sourced from IRESS.
2 Based on AUD:CAD of 0.9030 as at close
31 July 2024. Data sourced from
IRESS.
3 Based on AUD:CAD of 0.9030 as at close
31 July 2024. Data sourced from
IRESS.
SOURCE Westgold Resources Limited