Westgold and Metals X have announced today they will merge.
The merger will see Metals X, which is the only tin producer in Australia, fully acquire Westgold for approximately $67 million.
According to the company, Westgold already has cash and investments of more than $100 million.
Michael Atkins, Westgold’s chairman, said the “board has held the view for some time that the company’s projects are not receiving appropriate recognition in the equity market and that there are significant funds required to bring both the Central Murchison Gold project and the Rover 1 project into development and subsequently production.
“This is an attractive proposal from metals X, which brings the financial strength to rapidly progress these assets and expose Westgold shareholders to a diversified range of commodities as part of a larger, well funded mining house.”
Metals X is already the largest shareholder of Westgold, with a controlling interest of close to 27%.
Warren Hallam, who is both the managing director of Metals X and a director of Westgold, said Metals X “has been an active support of Westgold for a number fo years and the merger is in line with the company’s strategy of supporting its strategic investments through to production.
“The merger provides continued diversification and growth to our current portfolio and presents an excellent opportunity to leverage off Metals X’s financial and balance sheet strengths to develop th3e Central Murchison gold project.”
According to the two companies, the merger will create a single entity with a market cap in excess of $330 million, as the merger values Westgold at around $91.5 million.
It will be voted on in August this year, with the actual merger to take place in either late August or early September.