Greenstone Resources reaches agreement to merge with Horizon Minerals
Combined company will have ~1.8Moz of gold resources near Kalgoorlie and Coolgardie
Merger represents a 89% premium to Greenstone’s last traded price on 9 February 2024
Special Report: Greenstone Resources has reached an agreement to merge with Horizon Minerals to create an emerging gold producer with ~1.8Moz of the precious metal in WA’s Goldfields region.
Greenstone Resources (ASX:GSR) will bring its Burbanks and Phillips Find projects which collectively have combined resources of 6.8Mt @ 2.4g/t gold, or 520,134oz of contained gold, near Coolgardie into the merged company.
The two projects are supported by a network of existing infrastructure – including power, several neighbouring treatment plants and sealed roads..
Merger agreement ‘unanimously recommended’
Under the agreement with Horizon Minerals (ASX:HRZ), the merger will be conducted by way of a scheme of arrangement, with HRZ set to acquire all shares and listed options for GSR.
GSR shareholders will receive 0.2868 HRZ shares for every GSR share they hold, while listed option holders will also receive 0.2868 HRZ shares for every listed option held.
This represents a 40% premium to the 30-day volume weighted average price of 0.74c per GSR share for the period up to 9 February 2024.
HRZ shareholders will own 63.1% of the merged entity while GSR shareholders will hold the remaining 36.9%.
GSR’s board has unanimously recommended the scheme and each director intends to vote all GSR share they control in its favour, subject to no superior proposal emerging and the independent expert concluding the merger is in the best interests of shareholders and option holders.
More firepower in the WA Goldfields
The combined group, which will continue to trade as Horizon Minerals, will have a global resource ~1.8Moz, along with highly prospective exploration acreage centred around the gold mining hubs of Kalgoorlie and Coolgardie.
These assets will offer both near-term small mining opportunities and larger baseload and high grade deposits with potential to develop into long-life cornerstone operations.
Adding further interest, the combined group will have a cash and listed investments balance of ~$14.9m and lower consolidated costs to pursue growth with.
“There is strong alignment between Greenstone’s strategy and that of Horizon, which is one of the core pillars underpinning this regional consolidation,” GSR managing director Chris Hansen said.
“Together we have greater capability to deliver on near-term cashflow generation which provides a stepping stone to delivering a longer-life, cornerstone operations fitting for an emerging mid-tier producer.
“Through the combination of our teams, we are also able to bring all the necessary skillsets at a Board and senior management level which will enable us to achieve our ambitions.”
HRZ chief executive officer Grant Haywood says the proposed merger represents a unique opportunity to build a resource base in the WA Goldfields with higher grade deposits near established mining and processing infrastructure.
“This really is a logical consolidation of complementary assets which creates greater potential for Horizon to unlock the value within our longer project pipeline,” Haywood says.
“Following a period where we divested non-core assets and brought greater focus onto a pipeline of smaller, near-term cash generating mining opportunities, this merger with Greenstone will both add to this near-term pipeline and bring greater scale to our baseload assets with the addition of the high-grade Burbanks deposit.”
Merged management team and key dates
On completion of the merger, Haywood will be appointed HRZ’s managing director while Hansen will continue to serve as a non-executive director.
HRZ non-executive chairman Ashok Parekh will continue in his role, with Jon Price also staying on as a non-executive director.
For the senior management, HRZ’s Julian Tambyrajah will be chief financial officer while GSR’s Glenn Poole will become the combined group’s chief geologist.
The first court hearing and dispatch of scheme booklets to shareholders is expected in mid-April, with scheme meetings and the second court hearing for approval to be held about a month after that.
Effective date for the merger is expected to be mid-to-late May with implementation in mid-June.
This article was developed in collaboration with Greenstone Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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