Australian gold producer Ramelius Resources will acquire its smaller rival Spartan Resources in a deal valuing the latter at approximately A$2.4bn ($1.5bn).
The acquisition, proposed under a binding transaction implementation deed, is expected to bolster Ramelius' position in the gold mining sector amidst rising bullion prices.
The offer for Spartan represents an 11.3% premium over its closing price of A$1.60 on 14 March, according to a statement released by Ramelius.
The acquisition will grant Ramelius ownership of Spartan's flagship Dalgaranga gold project in Western Australia (WA).
In November 2024, Spartan secured regulatory approvals to transition its Dalgaranga gold project from development to full-scale underground mining.
The merger is set to create a leading Australian gold producer, with projected output surpassing 500,000oz annually by 2030.
Upon completion of the deal, Spartan shareholders, excluding the existing 19.9% stake held by Ramelius, will retain a 39.5% interest in the combined group.
The proposed terms include the issuance of 0.6957 new Ramelius shares plus A$0.25 in cash for each Spartan share held.
This move comes at a time when gold prices have reached unprecedented heights, crossing $3,000/oz last week. The surge in prices, driven by robust central bank purchases and demand for safe-haven assets, has led to a 38% increase in the metal's value over the past year, reported Bloomberg.
The industry has witnessed a wave of mergers and acquisitions as a result of the rising gold prices.
Recent transactions include Northern Star Resources' A$5bn acquisition of De Grey Mining and Equinox Gold's C$2.6bn ($1.8bn) purchase of Calibre Mining in Canada.
