White Rock Minerals Ltd (ASX:WRM) is set to become a high-grade Victorian gold explorer and production folling entering into a binding merger implementation deed (MID) with AuStar Gold Ltd (ASX:AUL), enabling WRM to acquire 100% of the issued capital of AUL through a scheme of arrangement between the two companies and their shareholders.
The Scheme consideration is to be paid in the form of shares in White Rock with each AuStar Gold shareholder receiving 0.78 White Rock shares for each AuStar Gold share held.
This implies a price of 43.5 cents per AuStar Gold share on issue and is based on the 1-month VWAP AuStar Gold share price of 27.8cps and the 1-month VWAP White Rock share price of 55.7cps (as at the close of trading on February 2, 2021).
The merged group, which will retain the name 'White Rock Minerals Ltd', will be a substantially enlarged, diversified gold explorer and producer with a world-class portfolio of assets.
Projects include the bulk of the high-grade Victorian Walhalla-Woods Point gold belt, the large Red Mountain (Alaska) Silver-Zinc-GoldLead VMS and Last Chance Gold IRGS project and the advanced pre-development stage Mount Carrington gold-silver project located in New South Wales.
“Closer to being a producer”
White Rock Minerals chairman Peter Lester said: “White Rock is delighted with the prospect of adding high potential Victorian gold exploration, including a modest production base, in one of Victoria’s most prolific historical gold production regions to its portfolio.
“With the Morning Star mine and processing plant in place, Austar will also move White Rock closer to being a producer and open up exposure to the growing Victorian exploration and mining scene which has enjoyed a considerable resurgence in recent times.
“The combination of our two companies and the pursuit of the new opportunities in Victoria will add to the 2021 programs already in place for White Rock’s exiting assets in Alaska, and provide greater opportunity for growth for both groups of shareholders.”
Key benefits to White Rock shareholders
Benefits to shareholders include the following:
- Shareholders will gain exposure to the significant exploration potential and interest that currents exists in the Victorian goldfields area;
- The significant exploration potential of the Victorian land package offers a counter-cyclical and news flow opportunity to its highly prospective but northern hemisphere Alaskan project at Red Mountain;
- White Rock will join the league of Australian gold producers, the goal for many a small Junior exploration company;
- The merged group will have a larger and more diverse asset portfolio, covering two first world jurisdictions (the USA and Australia), and gold, silver and zinc, all with JORC Resources; and
- The merged group is expected to have enhanced access to new investment and other opportunities through its increased size, stronger financial capability and diversified shareholder base.
AuStar Gold director Paul Mcnally said: “I am extremely pleased to be announcing this transaction, which delivers for AuStar Gold shareholders a certain path forward to accelerated activity on the Company’s world-class Victorian gold tenements, as well as the benefit of exposure to White Rock’s high-potential exploration and development assets in Alaska and New South Wales."
“Such an acquisition comes rarely”
White Rock technical advisor Dr Quinton Hennigh said: “As the acquisition is not expected to significantly impact White Rock's current exploration momentum in Alaska, it gives White Rock shareholders exposure to a potentially high-value year-round exploration asset in one of the most prolific gold belts on earth.
“Along with this comes the element of production at Morning Star which White Rock plans to ramp up to underpin White Rock's cash flow going forward.
“Such an acquisition opportunity comes along rarely and is expected to help White Rock build a solid foundation upon which to grow.”