Gascoyne Resources has agreed to take over Firefly Resources in a proposed deal that would combine the two companies’ complementary assets in the Murchison region of Western Australia.
According to a statement by Gascoyne, the merger will unlock a number of synergies by leveraging its gold mining expertise and available processing infrastructure at Dalgaranga for the benefit of Firefly’s highly prospective suite of assets.
Gascoyne managing director and chief executive officer Richard Hay said: “This merger is a very exciting opportunity for Gascoyne and its shareholders and represents a key step forward in Gascoyne’s strategy of delivering value by extending mine life and increasing annual production at Dalgaranga.
“The integration of high-grade Yalgoo ore in our production plan moving forward has excellent potential to extend mine life, reinforcing Gascoyne’s position as a key gold producer in the Murchison region.
“Furthermore, the merger with Firefly will consolidate 1200 square metres of the Yalgoo and Dalgaranga greenstone belts under single ownership, significantly enhancing the exploration upside potential with over 100 high quality targets.
“Any discoveries can quickly be brought into production at Gascoyne’s high quality, low cost Dalgaranga processing plant.”
Hay said the company would aim to bring Firefly’s Melville deposit at Yalgoo into production by the first quarter of financial year 2023.
Firefly managing director and chief executive officer Simon Lawson said the combination of Gascoyne and Firefly is a compelling opportunity for value-creating in the Murchison district.
“Firefly shareholders will have the opportunity to be part of a larger, regional gold company with strong cash-flows, enhanced market positioning and the ability to rapidly unlock the exploration potential of a consolidated 1200-square-metre ground position in the Yalgoo and Dalgaranga greenstone belts,” he said.
“Firefly shareholders will hold approximately 32 per cent of the merged entity, with the transaction providing an opportunity for immediate value realisation at an attractive premium.
“Through their holdings in the enlarged Gascoyne, Firefly shareholders will stand to benefit from the re-rating that we would expect to flow from the creation of a larger gold company with an increased mine life and enhanced production profile.”