Nearly six months after a merger was first proposed, gold explorer GGG Resources has come to an agreement with joint venture partner Auzex which will fast-track development of the Bullabulling gold project near Kalgoorlie.
GGG announced today it had signed a binding heads of agreement with Auzex to combine the project into a single corporate entity, named Bullabulling Gold Limited and listed on the Australian Securities Exchange and London’s Alternative Investment Market.
The two companies each own a 50 per cent stake in the 2.6 million ounce project, while the merged company will have a market capitalisation of around $95 million.
The transaction requires the implementation of two schemes, GGG said.
Firstly, GGG will create an Australian registered company called Bullabulling Gold and go through a UK Scheme of Arrangment to exchange each share, option and warrant for Bullabulling Gold shares.
The company would then apply for admission to the ASX as its primary listing, with a second listing on the AIM.
Auzex and Bullabulling would then merge under an Australian Scheme of Arrangement.
Also, Auzex said it would spin-off its non-Bullabulling assets into a new company.
Auzex chairman Chris Baker said the transaction delivered an “outstanding outcome”.
“It has been complex to structure and negotiate due to requirements of both parties ensuring the interests of all shareholders was recognised and that they benefited equally from the outcome.
"This merger will provide the opportunity to unlock significant value for both parties and ensure the fast-track development of the Bullabulling Gold project at a critical time in its development.”
GGG chairman Peter Ruxton said with an accelerated development plan in motion at Bullabulling, the timing was right to go ahead with a merger.
“To facilitate its full independence, Bullabulling Gold Limited will operate with a new independent board led by a senior management team operating out of Western Australia with help and assistance from a number of existing GGG and Auzex directors during the transition phase,” Mr Ruxton said.
“And while we are in a high gold price environment, we are pleased that BBG will be finding out just how significant the gold deposit could potentially bem as well as fast-tracking the mine through feasibility studies.
“Consolidation of the asset will enable this process to be accelerated."
GGG first presented an all-scrip takeover offer the AUzex in March, when it offered seven GGG shares for every five Auzex shares.
Auzex ' board told shareholders to reject GGG's offer, calling it flawed and grossly inadequate.
That offer will lapse on September 5, and GGG said it would not accept any of the shares tendered so far.
At 12:30PM (WST), Auzex’ stock had gained 6.5 cents to 45.5c, while GGG shares were up 1.5c, to 56.5c.
