 |
|
| Climax's Dinkidi gold-copper project |
The two Australian companies with overseas projects – Oceana in New Zealand and Climax in the Philippines – expect to put the proposed merger to shareholders in late October.
The terms of the merger will see Climax shareholders given 0.62 of a share in Oceana for every share in Climax held along with 0.31 of an option to acquire an Oceana share for 92.5c. The options will mature in 30 months.
Climax option holders will receive the equivalent value for their options.
Oceana says the offer represents a 27% average to the weighted average of Climax shares for the 30 days prior to the announcement. Climax shares have retreated from a high of 72c reached in mid-May.
The merged company, to be known as Oceana Gold, will be about 44% owned by Climax shareholders. It will have a market capitalisation of $A523 million based on the two companies' respective share prices at close of trade yesterday.
Oceana's flagship project is the Macraes gold mine on New Zealand's South Island that produced 170,019oz in the 2005 calendar year.
The company is also developing the Globe Progress mine in the Reefton gold field in New Zealand as well as the Frasers underground project to access the deeper portions of the Macraes ore body.
Climax is in the process of arranging the financing and offtake arrangements for its Dinkidi copper-gold project in the Philippines that is forecast to produce 130,000oz of gold and 14,000 tonnes of copper concentrate annually.
The proposed merged entity will have a reserve base of 4.8 million ounces gold equivalent and a production profile including gold, copper and silver from the two companies' mines in New Zealand and the Philippines.
In a joint statement, the two companies said the merger will allow them to pursue growth opportunities throughout Australasia and give better access to development capital.
Current Climax chairman Jim Askew will become the new chairman of the merged company and Oceana chairman Kerry MacDonald will act as deputy chairman.
Oceana chief executive Stephen Orr will continue on in the same position with the new company.
Both companies have agreed to a $2.5 million break fee.
Oceana gold shares pulled back from early gains to close unchanged at 82c, capitalising the company at $275 million. Climax shares closed up 3c (6%) at 53c leaving the company with a market capitalisation of $227 million.
