A merger between Westgold and Metals X, announced in mid-May, will create a diversified explorer and producer with a market value of more than $330 million.
Metals X – Westgold’s largest shareholder since 2007, with an existing 26.98 per cent interest – has implied an offer price of $0.22 per Westgold share, representing a significant 33.3 per cent premium to the company’s May 9 closing price.
The merger will unify an exciting portfolio of growth assets, including the Renison and Rentails tin projects in Tasmania, the Wingellina nickel and Central Murchison copper-gold projects in WA, and the Rover 1 copper-gold project in the Northern Territory.
“Westgold’s board has held the view for some time that the company’s projects are not receiving appropriate recognition in the equity market, and that there are significant funds required to bring both the Central Murchison gold project and the Rover 1 project into development and, subsequently, production,” Westgold chairman Michael Atkins said.
“This is an attractive proposal from Metals X, which brings the financial strength to rapidly progress these assets and expose Westgold shareholders to a diversified range of commodities as part of a larger, well-funded mining house,” he said.
Westgold has positioned itself as one of Australia’s next mid-tier gold producers, targeting production of 200,000 ounces per annum from Rover 1 and Central Murchison, which have an aggregate resource base of almost 4 million ounces of gold.
A definitive feasibility study for Central Murchison is due for completion this month, with early production slated for 2013.
By Reuben Adams