Superior Gold Inc, a Canadian-based gold producer, has entered into a takeover agreement with Catalyst Metals, an Australian exploration company.
Under the agreement, Catalyst will acquire all issues and outstanding common shares in the gold company.
Superior’s shareholders can expect an exchange rate of 0.3571 of ordinary share in Catalyst for each Superior share held. This equates to $0.44 per Superior share, making for a total equity value for Superior of roughly $59 million.
The exchange implies a 52 per cent premium to the 20-day volume weighted average prices of both Catalyst and Superior at Friday’s close.
The takeover will mean Catalyst acquires 100 per cent ownership of Superior’s Plutonic gold operations in WA, which has a 5.9-million-ounce reserve.
“This is the transaction that Superior and Catalyst shareholders have been looking for,” Catalyst managing director James Champion de Crespigny said.
“It is a logical consolidation that offers significant potential for operating synergies while also lowering risk.”
Superior announced the agreement to its shareholders.
“We are very pleased to offer shareholders … the consolidation of the Plutonic-Marymia gold belt, with a meaningful immediate premium, diversification of assets and cash flow and, logically, a listing on the ASX,” Superior chief executive officer Chris Jordaan said.
“We believe the transaction will create a strong platform from which to advance the development of the Plutonic underground mine and surrounding open pit projects.
“Shareholders will also benefit from Catalyst’s strong Australian shareholder register, financial strength and portfolio of exploration projects.
“Catalyst will bring to Plutonic a team with international mining experience, a proven track record of exploration success and the financial resources to develop the district.”
The transaction will be implemented by way of a court-approved plan of arrangement, pending a majority vote in favour by shareholders.