Aurum Resources (ASX:AUE) and Mako Gold (ASX:MKG) announced on Wednesday (October 16) that they have agreed to merge, forming a West Africa-focused gold explorer and developer.
Through the acquisition, Aurum plans to take over Mako, resulting in a combined company with a market capitalization of AU$90 million and AU$20 million in cash. The newly formed entity will progress the Napié and Boundiali gold projects in Côte d’Ivoire.
Additional Insight: The merger between Aurum and Mako signifies a strategic move to consolidate resources and expertise in the West African gold sector, leveraging the complementary strengths of each company.
The merger will be executed via off-market takeover bids, with Aurum making offers for 100 percent of Mako’s shares, Class A Options, and Class B options.
Upon completion of the transaction, Aurum shareholders are expected to own approximately 79.5 percent of the combined entity, while Mako shareholders will retain a 21.5 percent stake. This offer represents a generous 112 percent premium for Mako shareholders.
“We have always believed our Napié Project has the potential to host multi-million ounces of gold, and pleasingly, due to the relative sizes of Mako and Aurum, Mako securityholders will remain a significant part of the expanded group, allowing them to benefit from the continued growth at Napié,” stated Peter Ledwidge, managing director at Mako.
Napié, the flagship project of Mako which it owns 90 percent of, includes the Tchaga and Gogbala deposits with an inferred mineral resource estimate of 22.45 million tonnes at 1.2 grams per tonne for 868,000 contained ounces of gold.
Additional Insight: The merger not only enhances the potential of the Napié Project but also underscores the companies’ shared commitment to unlocking value from their respective assets through collaborative exploration and development efforts.
Dr. Caigen Wang, managing director at Aurum, emphasized the growth prospects at Napié and the anticipated maiden mineral resource estimate at Aurum’s Boundiali asset, slated for later this year. He highlighted the synergies between the two projects, foreseeing Aurum’s emergence as a prominent gold developer in Côte d’Ivoire.
The companies emphasized the advantages for shareholders, including Aurum’s robust balance sheet and operational efficiency in drilling activities.
The complete bid implementation agreement, along with its terms, will be disclosed to the public in the near future.
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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Aurum Resources is a client of the Investing News Network. This article is not paid-for content.
