PERTH (miningweekly.com) – ASX-listed juniors Aphrodite Gold and Spitfire Materials on Monday announced a merger to create a diversified Australian gold development company with a combined resource of some 1.3-million ounces.
Under the terms of the agreement, Spitfire has agreed to acquire all of the outstanding capital of Aphrodite, in which it currently holds a 10.38% stake, offering shareholders one new Spitfire share for every 2.9 Aphrodite shares held.
The transaction valued Aphrodite shares at 4.49c each, which was an 87% premium to the company’s closing price on August 11, and a 93% premium to the five-day volume weighted average share price.
The merged entity will have a Joint Ore Reserves Committee-compliant resource of 13.1-million tonnes, grading 2.99 g/t gold for 1.26-million ounces of gold from the Aphrodite gold project, in Western Australia, while also holding exposure to the Alice River gold project, in Queensland, and exploration assets in the Northern Territory.
The two companies told their respective shareholders on Monday that the merger would generate significant value for both sets of shareholders, who will have exposure to a number of projects across Australia.
Shareholders were also expected to benefit from a strengthened board and management team, which would include Neil Biddle and John Young, the founding directors of Pilbara Minerals.
“This transaction with Aphrodite provides an exciting platform to fast-track the growth of a significantly enhanced ASX-listed gold company with a strong pipeline of growth assets,” Young, who is Spitfire’s MD, said.
“The combination of our Western Australian assets at Aphrodite and Mulwarrie gives us the critical mass to pursue a near-term development strategy based on the potential establishment of a new production hub near the world-class mining centre of Kalgoorlie.
“The larger resource inventory at Aphrodite has exceptional exploration upside and growth potential and offers significant synergies with our emerging discovery at Mulwarrie.”
He said that the transaction was consistent with Spitfire’s strategy to create value for shareholders through aggressive exploration and value accretive strategic acquisitions in high quality mineral provinces, providing the company with what was essentially a fast-track pathway to create Australia’s next significant midtier gold company.
Aphrodite executive chairperson Peter Buttigieg has meanwhile said that the transaction represented a great outcome for shareholders, enabling them to retain participation in the Aphrodite gold project while gaining exposure to Spitfire’s exploration portfolio.
The merger was subject to a number of conditions, including due diligence, regulatory and shareholder approval, and an independent expert supporting the transaction.
Edited by: Creamer Media Reporter
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