Pantoro and Tulla Resources have announced an all scrip merger, consolidating 100 per cent ownership of the Norseman gold project.
The merger will create a new mid-cap ASX-listed gold company with target production of 110,000 ounces per annum, a mineral resource of 4.79 million ounces (Moz), and an ore reserve of 0.98Moz.
Under the agreement, Pantoro will acquire Tulla Resources, resulting in Pantoro’s shareholders owning 51.5 per cent of Pantoro’s ordinary shares, and Tulla’s shareholders owning 48.5 per cent.
The Norseman gold project had previously been owned on a 50:50 basis between Pantoro and Tulla.
Pantoro managing director Paul Cmrlec said the merger would give Norseman the best opportunity for success.
“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,” he 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 per cent ownership of the industrial mineral rights at Norseman,” he said.
“I look forward to serving on the new board and working with our former joint venture partner to maximise future value for all shareholders.”