Karora shareholders back Westgold merger

Shareholders of Canada’s Karora Resources (TSX: KRR) (OTCQX: KRRGF) have almost unanimously voted in favour of a A$1.23 billion ($818m) acquisition by Australia’s Westgold Resources (ASX: WGX).

The final step for the creation of a Western Australian gold producer with an annual output of over 400,000 ounces of gold per year is obtaining approval from the Ontario Superior Court of Justice, which is expected to hear the case on July 24.

The scheme of arrangement required at least 66.6% of votes supporting the deal. This was greatly surpassed as the transaction received 99% approval from shareholders.

Westgold managing director and chief executive officer Wayne Bramwell said the overwhelming support shown by Karora investors confirmed “the independently verified value and the compelling commercial rationale behind this transaction.” 

“With the integration of the Karora assets, the expanded Westgold will have strategic footprints across two of Western Australia’s most prolific goldfields,” Bramwell noted.

The transaction, slated to close on August 1, will see Westgold taking ownership over Karora’s Australian Beta Hunt and Higginsville gold mines. These are both high-performing assets nestled in the same region as Westgold’s iconic Bluebird and Great Fingall mines. 

Westgold will also own the Lakewood gold mill near Kalgoorlie.

The combined company will become a mid-tier gold miner with ore reserves of 3.2 million ounces of gold, resources of 13 million ounces of the metal, and a market capitalization of about A$2.2 billion ($1.46bn).