Joint venture partners since May 2019, Pantoro and Tulla Resources are merging to create a new mid-cap Australian gold company.
The all-scrip merger will consolidate 100 per cent ownership of the Norseman gold project in WA, with Pantoro acquiring Tulla, and shares in the expanded Pantoro owned 51.5 per cent by Pantoro shareholders and 48.5 per cent by Tulla shareholders.
The merger has unanimous support from both Pantoro and Tulla boards, as well as Tulla’s majority 54.9 per cent shareholder, Tulla Resources Group, controlled by the Maloney family. This support stands in the absence of a superior proposal.
The consolidated company is targeting 110,000 ounces of gold production per annum from its current mineral resource of 4.79 million ounces (Moz) and ore reserve of 0.98Moz at Norseman. 7220oz of gold were produced from Norseman in the December quarter of 2022 as the project continues its ramp-up.
“Consolidating the Norseman gold project into a single entity is a logical step for all parties to maximise value as the project ramps up to reach its full potential as a premier gold asset in Western Australia,” Pantoro managing director Paul Cmrlec said.
“While Norseman has experienced delays and challenges in its ramp-up, key operational and management changes made late in 2022 are now yielding positive results, with productivity and throughput increasing month on month and process plant ramp-up now virtually complete to nameplate capacity.”
In support of the merger, Pantoro has launched a $75 million capital raise through a two-tranche institutional placement of 1.25 million shares.
The placement will be priced at $0.06 per share, representing a 31.8 per cent discount to Pantoro’s closing share price of $0.088 on Friday.
“The equity raising ensures that the combined group is well funded through the initial phases of production and enables the reduction of the consolidated debt position of the company during this critical phase,” Cmrlec said.
Tulla executive director Mark Maloney echoed Cmrlec’s sentiment.
“Tulla shareholders will realise the upside of their investment in a significant mid-tier Australian gold producer, with a large, high-grade operation of very substantial value while maintaining 100% ownership of the industrial mineral rights at Norseman,” he said.
If the placement raises $75 million, Pantoro shareholders will own 37.8 per cent of Pantoro’s ordinary shares, with Tulla shareholders owning 35.6 per cent.
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