A new merger between ASX-listed gold producers Horizon Minerals and Greenstone Resources is set to create a new emerging gold producer in the Western Australian Goldfields.
Under the merger, Horizon will acquire 100 per cent of the fully paid ordinary shares in Greenstone (share scheme) and 100 per cent of the listed Greenstone options (options scheme), subject to the satisfaction of various conditions.
Under the two schemes:
- Each Greenstone shareholder will receive 0.2868 Horizon shares for every Greenstone share held
- Each Greenstone listed option holder will receive 0.2868 new Horizon listed options for every listed Greenstone option held.
Based on the last trading price of Horizon and Greenstone, the exchange ratio under the share scheme represents:
- An 89 per cent premium to Greenstone’s last traded price on 9 February 2024 of $0.0055
- A 40 per cent premium to the 30-day volume weighted average price of $0.0074 per Greenstone share for the period up to 9 February 2024
Horizon shareholders will own 63.1 per cent of the merged entity while Greenstone shareholders will own the remaining 36.9 per cent.
The schemes are unanimously recommended by the Greenstone Board and each member of the Greenstone Board intends to vote all Greenstone Shares they control in favour of the share scheme and all Greenstone Listed Options they control in favour of the option scheme, subject to no superior proposal emerging and the Independent Expert concluding, and continuing to conclude, that the schemes are in the best interests of Greenstone shareholders and option holders respectively.
The combined group will have a global JORC Mineral Resource of approximately 1.8 million ounces, as well as a significant exploration holding, all of which is centred around the gold mining hubs of Kalgoorlie and Coolgardie.
The transaction brings together complementary assets with both near-term small mining opportunities and larger baseload deposits with potential to develop into long-life cornerstone operations.
The combined group will be pursuing its growth strategy from a position of greater market scale, underpinned by a cash and listed investments balance of approximately $14.9 million and lower consolidated cost base.
Post implementation, the merged entity will continue to trade as Horizon Minerals under the ticker ASX: HRZ.
Completion of the schemes is targeted for June 2024. The schemes remain subject to various customary closing conditions.
Horizon’s Chief Executive Officer, Grant Haywood, said, “We believe this proposed merger represents a unique opportunity to build our resource base in the Western Australian 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.
“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 base load assets with the addition of the high-grade Burbanks deposit.”
Greenstone Resources’ Managing Director and CEO, Chris Hansen, said there is strong alignment between Greenstone’s strategy and Horizon’s, which is one of the core pillars underpinning the regional consolidation.
“Together we have greater capability to deliver on near-term cash flow 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 skill sets at a board and senior management level which will enable us to achieve our ambitions. When put together, the merged entity will be in a much stronger position to deliver value for both sets of shareholders.”
