HopgoodGanim Lawyers is pleased to have advised Karora Resources Inc. (TSX: KRR) (Karora) in a merger of equals transaction with Westgold Resources Limited (ASX: WGX) (Westgold) which is expected to significantly expand the enlarged Westgold portfolio.
Karora is a multi-asset mineral resource company focused primarily on the acquisition, exploration, evaluation and development of precious metal assets, most notably through its Beta Hunt Mine and Higginsville Gold Operations in Western Australia.
Under the merger, Westgold will acquire 100% of the issued and outstanding shares of Karora pursuant to a Canadian plan of arrangement. For each Karora share, Karora shareholders will receive 2.524 Westgold shares, AUD$0.68 in cash and 0.30 of a share in a new company to be spun out from Karora (SpinCo). SpinCo will include Karora’s 22.1% existing shareholding in lithium explorer Kali Metals Limited (ASX:KM1) (Kali) and a 1% lithium royalty on certain mining interests held by Kali, and Karora’s rights to received deferred consideration relating to the on-sale of the Dumont asset and CAD$5 million in cash. SpinCo will be owned 100% by existing Karora shareholders. Upon completion of the transaction, Westgold shareholders will own approximately 50.1% of the combined company, and former Karora shareholders will own 49.9%.
Following the merger, the combined company is expected to possess a market capitalisation of approximately AUD$2.2 billion and will feature a portfolio capable of generating over 400,000 ounces of gold annually from its assets in Western Australia. It is also predicted to become a significant mid-tier gold producer in Western Australia and rank among the top five ASX-listed Australian gold producers by market capitalisation.
The HopgoodGanim team was led by Nino Odorisio, Robyn Ferguson and James Plumb, Alison Cooper, Lily Robinson, and Claudia Hill, who provided strategic legal advice to facilitate the acquisition. This merger transaction is another successful collaboration of our Corporate and Commercial, and Resources and Energy teams.