SYDNEY, AUSTRALIA: Horizon Minerals Limited (ASX: HRZ) and Greenstone Resources Limited (ASX: GSR) have announced a merger that will create a gold mining powerhouse in the Western Australian Goldfields, a financial news announcement noted.

The merger will be conducted by way of schemes of arrangement, whereby Horizon will acquire 100% of the fully paid ordinary shares and listed options in Greenstone, subject to the satisfaction of various conditions.

Under the terms of the merger, each Greenstone shareholder will receive 0.2868 Horizon shares for every Greenstone share held, and each Greenstone listed option holder will receive 0.2868 new Horizon listed options for every listed Greenstone option held.

The exchange ratio represents an 89% premium to Greenstone’s last traded price on 9 February 2024 and a 40% premium to the 30-day VWAP of Greenstone shares for the period up to 9 February 2024.

Horizon shareholders will own 63.1% of the merged entity while Greenstone shareholders will own the remaining 36.9%.

The combined group will have a global JORC Mineral Resource of ~1.8 million ounces, as well as an enviable 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 ~$14.9 million and lower consolidated cost base.

Post implementation, the merged entity will continue to trade as Horizon Minerals Ltd under the ticker ASX: HRZ.

Completion of the merger is targeted for June 2024, subject to various customary closing conditions.

Horizon Chief Executive Officer Mr Grant Haywood said the merger represented a unique opportunity to build their resource base in the WA Goldfields with higher grade deposits near established mining and processing infrastructure.

He said the merger was a logical consolidation of complementary assets that created greater potential for Horizon to unlock the value within their longer project pipeline.

Greenstone Managing Director & CEO Mr Chris Hansen said there was strong alignment between Greenstone’s strategy and that of Horizon, which was one of the core pillars underpinning the regional consolidation.

He said the merger would enhance their capability to deliver on near-term cashflow generation and provide a stepping stone to delivering longer-life, cornerstone operations fitting for an emerging mid-tier producer.

He also said the merger would bring all the necessary skillsets at a Board and senior management level to enable the success of the combined group.