Spitfire Materials is to acquire Excelsior Gold as part of new merger plans. The two companies have signed a merger implementation agreement that will lead to the creation of a consolidated indicated and inferred JORC resource of over 2 million ounces (2Moz) of gold in the Bardoc tectonic zone of North Kalgoorlie, Western Australia.
The two companies are expected to consolidate gold interests at their existing North Kalgoorlie projects, including Excelsior’s Kalgoorlie North and Spitfire’s 1.3Moz Aphrodite project, which was acquired from previous owner Aphrodite Gold by Spitfire in a merger last August.
Once merged, a new pre-feasibility study (PFS) of the combined land area encompassing these projects is expected to take place.
“The combination of our respective WA gold assets gives us the critical mass to pursue a near-term development strategy based on the establishment of a new production hub near the world-class mining centre of Kalgoorlie,” said Spitfire managing director (and leader of the merger) John Young.
“The large resource inventory at Aphrodite has exceptional exploration upside and growth potential, and offers significant synergies with our emerging high-grade discovery at Mulwarrite.”
Once the new company (which has yet to be named) is completed, the board will comprise of three members each from the Spitfire and Excelsior boards for a total of six board members.
Spitfire will be the majority stakeholder for the merger, holding 58.3 per cent of the new entity’s shares while Excelsior will hold the remaining 41.7 per cent. As is typical with such mergers, the arrangement is subject to shareholder and regulatory approvals.
Excelsior shareholders will receive one fully paid ordinary Spitfire share for every 2.208 Excelsior shares under the pair’s scheme of arrangement, with Excelsior’s shares priced at roughly 4 cents per share based on a 30-day volume weighted average.
Rowan Johnston, managing director of Excelsior, also commented, “This may be one of the few ‘one plus one equals three’ scenarios in the WA gold sector, as the synergies between the two companies are exceptional. There is no doubling up of management or board skills, the two companies will blend seamlessly into one, and the leases adjoin each other.
“The combined leases provide a clear pathway to near-term production, as well as a significantly enhanced exploration portfolio through an extensive and consolidated land-holding covering the highly prospective Bardoc tectonic zone.”