Intermin Resources and MacPhersons Resources have agreed to merge into a new gold company that will operate in the Goldfields region of Western Australia.
The merger will combine the two companies’ mineral resources for a combined 1.15 million ounces of gold.
MacPhersons’ primary interest is the Boorara project, 10 kilometres east of Kalgoorlie, which hosts an estimated resource of 506,000 ounces.
The merger is subject to approval from MacPhersons shareholders, but the company’s board has unanimously recommended the offer.
Intermin is offering one full company share for every 1.8227 MacPhersons shares at 8.25 cents each, valuing the smaller company at about $29 million.
The new company is expected to be named Horizon Minerals, subject to the approval of Intermin’s shareholders.
Intermin would hold 55 per cent of Horizon and MacPhersons the remaining 45 per cent.
Intermin managing director Jon Price, who will also take the same role at Horizon, said the merger was consistent with the company’s growth strategy.
“The logical consolidation of these complementary assets will provide the critical mass to underpin a larger scale production profile, improved balance sheet and stronger business,” he said.
“Combining MacPhersons’ large baseload Boorara deposit with the nearby, higher-grade Intermin projects should enable a more rapid pathway to production with sufficient scale to avoid the need for third party toll mining.”
One of Horizon’s first acts as a company would be a feasibility study that integrates the gold operations of Intermin and MacPhersons.
Jeff Williams, MacPhersons managing director, said the deal would create the “economies of scale necessary to undertake a standalone development”.