Ramelius Resources is set to acquire the remaining Spartan Resources shares it does not own for approximately $2.4 billion.
Under the binding transaction implementation deed, Ramelius will pay $0.25 in cash and 0.6957 Ramelius shares for each Spartan share, with an implied value of $1.78 per Spartan share. Ramelius currently holds a 19.9 per cent shareholding in Spartan.
The scheme consideration represents a 11.3 per cent premium to Spartan’s last closing share price of $1.60 per share on March 14 and 27.5 per cent of Spartan’s 30-day volume weighted average price of $1.40.
Spartan is currently developing the Dalgaranga gold project in Western Australia, which comprises a fully developed gold mining operation, a carbon-in-leach processing facility, a camp and airstrip, and an extensive landholding with potential for new gold discoveries.
Dalgaranga produced 71,15 ounces (oz) of gold for the 2021–22 financial year (FY22) before being placed on care and maintenance in November 2022 following grade and reconciliation issues.
Since then, Spartan has worked to recommence operations at Dalgaranga by carrying out an exploration drill drive and identifying several new gold deposits, including Never Never, Pepper and Freak.
Acquiring Spartan will provide Ramelius access to an emerging gold project located 65km north-west of Mt Magnet, highlighting geographical synergies between both companies.
“Ramelius is delighted to be combining with Spartan, which will see Ramelius’ Mt Magnet production hub supercharged by the integration of Spartan’s high-grade Dalgaranga mineral resource,” Ramelius managing director Mark Zeptner said.
“The combination will see Mt Magnet deliver higher ounces, at higher grade, with higher margins. With the Spartan effect, Ramelius has a vision for the combined group to be a (more than) 500,000oz (per annum) producer in FY30.
“In addition to the incredible production potential combining these two companies delivers, we are also excited to see what the ongoing exploration efforts at Dalgaranga can deliver for the benefit of the combined group’s shareholders.”
If the scheme is implemented, Spartan shareholders will own 39.5 per cent of the combined group. The scheme has been unanimously recommended by the Spartan board.
“This is a highly attractive and transformational combination which we believe represents a great outcome for Spartan shareholders,” Spartan executive chairman Simon Lawson said.
“The combined group will be positioned as a leading mid-tier ASX-listed gold producer with an enviable and robust growth pipeline including a significantly de-risked development pathway for Dalgaranga underpinned by Ramelius’ robust balance sheet, strong cash generation and development expertise.
“With the expected commencement of operations at Dalgaranga we expect the enlarged Mt Magnet-Dalgaranga hub to cement itself as a long-life and low-cost mining operation.”
Lawson said Spartan shareholders will be able to gain exposure to the rest of Ramelius’ high-quality gold portfolio.
“I am looking forward to being involved in the next chapter of this exciting journey as deputy chair of the enlarged Ramelius, where I will be providing direction into a renewed exploration focus on a number of Ramelius existing assets as well as the development and growth of the high-grade Dalgaranga orebodies,” he said.
The Ramelius–Spartan deal joins the list of M&A that has taken place throughout the Australian gold sector in the last 12 months.
Other notable transactions include the Northern Star–De Grey Mining deal, the Red 5–Silver Lake Resources and Westgold Resources–Karora Resources mergers and the Greatland Gold–Newmont deal.
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