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Mt Morgans. Image: Dacian Gold.

Dacian Gold is set to merge with NTM Gold in an effort to consolidate the former’s Mt Morgans gold operations with the latter’s Redcliffe gold project in Western Australia.

The merger has been unanimously supported by NTM’s board, with the merger to see Dacian acquire 100 per cent of shares in NTM for around $96.4 million.

NTM’s Redcliffe gold project is within a 100-kilometre radius of the Mt Morgans gold operations.

The companies said this would create a second mining area for Mt Morgans and provide an extension to its mine life due to both sites being within haulage distance.

Dacian managing director Leigh Junk said the merger would create an “industry leading portfolio”.

“The merger with NTM creates an industry leading portfolio of advanced exploration targets underpinned by potential high-margin, low capital intensity development opportunities, which would significantly expand Dacian’s production profile through the addition of high-grade deposits to our operating plan, further future proofing our business,” Junk said.

“This merger will create value by delivering on our strategy of extending mine life, diversifying our production base and increasing operational flexibility at Mt Morgans.

“This is a logical step for Dacian to expand operations in our region by unlocking resources within haulage distance of our substantial processing infrastructure, enabling future resource and reserve additions to be brought quickly into production.”

The merged company will have more than 1300 square kilometres of prospective land to strengthen its foothold in the Leonora-Laverton district of Western Australia.

NTM managing director Andrew Muir said the merger would unlock the full potential of the Redcliffe gold project.

“This is a compelling transaction for NTM and provides the financial, processing and operating strength to unlock the value of the Redcliffe Gold Project,” he said.

“The transaction is an outstanding opportunity for NTM given the proximity of both companies’ assets and delivers to NTM shareholders immediate exposure to gold production while still enabling them to benefit from future exploration success at both Redcliffe and Mt Morgans.”

The companies’ mineral resource base of 45.4 million tonnes at 1.88 grams per tonne for 2.7 million ounces is anticipated to be fully realised under the merger.

Redcliffe’s grade profile would also be increased by more than 50 per cent to 2.4 grams per tonne as a result of integrating the project with Dacian’s Mt Morgans gold operation.

The merger will provide Dacian shareholders with 68.4 per cent and NTM shareholders 31.6 per cent of shares in the combined company.

NTM’s board has encouraged its shareholders to vote in favour of the merger’s conditions.