MELBOURNE, AUSTRALIA: Westgold Resources Limited and Karora Resources Inc. have announced a definitive merger agreement.

Under the arrangement, Westgold will acquire all outstanding shares of Karora, with shareholders receiving a mix of shares, cash, and SpinCo shares as consideration.

The transaction values Karora shares at approximately A$6.60 each, marking a premium over recent trading prices. Post-merger, the combined entity, to be known as Enlarged Westgold, will boast a market capitalization of around A$2.2 billion and a robust portfolio with a production capacity exceeding 400,000 ounces per annum from Western Australian assets.

Enlarged Westgold plans to list its shares on the Toronto Stock Exchange following the merger’s completion, which has received unanimous support from both companies’ boards. Key stakeholders, including directors and senior management of Karora, along with prominent shareholders, have expressed their support for the transaction through voting support agreements.

The merger is poised to create a powerhouse in the mining industry, with a strong asset base and significant financial resources to fuel future growth and exploration endeavors.

Westgold Managing Director and CEO Wayne Bramwell commented: “The prize here is Beta Hunt’s gold potential.

Rarely do you find a gold asset of the quality and potential of Beta Hunt hiding in a nickel belt and drilling is expected to further unlock value at this mine.

This merger brings Beta Hunt together with Big Bell, the emerging Bluebird and the iconic Great Fingall mine under one Australian management team.

These assets combined create the foundations of a new Australian gold mining powerhouse that is focused on free cash generation, is internationally relevant and investable and can stand head and shoulders alongside the biggest names in the Australian gold sector.

The Westgold and Karora teams have independently been structuring our businesses for growth for several years and now is the time to bring these two businesses together.

Overprint an experienced and expanded team with similar corporate journeys, strong safety and cultural alignment and a shared commitment to developing its people and we have a new business dominant across two historic, yet under-explored goldfields.

The expanded business will have several large mines, be well funded, fully leveraged to the gold price and have optionality over an enviable selection of growth opportunities.

Importantly, the business will have expanded human and physical resources to extend mine lives and production scale rapidly.

Westgold welcomes the Karora team, shareholders and stakeholders to the Westgold family and looks forward to creating value across two of Western Australia’s most iconic goldfields.”

Karora Chairman and CEO, Paul Huet commented: “For the last two years, Karora has watched Mr. Bramwell and the team consistently unlock material value for shareholders at Westgold.

One of the more unique aspects of this transaction is a very strong cultural fit between both companies which will serve shareholders of the enlarged company well for a very long time.

The merger is estimated to unlock approximately A$490 million of operational, G&A and capex synergies while shareholders will become proud owners of the largest unhedged gold producer in Australia at completion of the Transaction – certainly a compelling opportunity in the current gold price environment.

The team at Karora have worked diligently to execute on our strategy to build the next +200 kozpa Australian gold producer.

We have delivered value to shareholders through a disciplined growth approach by investing in our cornerstone asset in Beta Hunt, which will be fully ramped up to 2 Mtpa later this year, our pipeline of projects at Higginsville and through strategic asset acquisitions such as the Lakewood Mill and Spargos Gold Mine to establish the next emerging junior gold producer in the Western Australia gold fields.

With the combination of Westgold and Karora, we are taking the next step by combining two highly complementary, free cash flow generating asset bases in one of the world’s finest mining jurisdictions to create a premier Western Australian mid-tier gold producer.

Karora shareholders will benefit from having very meaningful ownership in a larger, more diversified gold producer with a highly experienced management team located entirely in Western Australia.”