Capricorn Metals and Warriedar Resources Propose Strategic Merger to Develop WA Gold Assets

Capricorn Metals (ASX: CMM) has won board and major shareholder backing from takeover target Warriedar Resources (ASX: WA8) for its proposal to combine the two companies’ significant Western Australian gold assets.

Capricorn will acquire 100% of the securities in Warriedar, with the latter’s shareholders to receive one new Capricorn share for every 62 Warriedar shares, giving them approximately 4.36% ownership of Capricorn.

Based on Capricorn’s last close price of $9.60, the transaction implies an equity value of approximately $135 million for Warriedar.

WA Gold Consolidation

The merger will add Warriedar’s flagship Golden Range Project (GRP), including the Ricciardo gold-antimony deposit and the Fields Find gold project, to Capricorn’s portfolio.

Strategically, the GRP assets are all located 90 kilometres from Capricorn’s Mt Gibson Gold Project (MGGP) development, and Capricorn views the two operations as highly complementary.

Capricorn anticipates the GRP acquisition will immediately increase its existing WA mineral resource base by approximately 25% while providing additional scale and exploration upside to augment the MGGP’s long-term potential.

It also sees strong synergies with the GRP’s processing plant (which is not currently operational) and other low-cost regional development opportunities through the project’s other infrastructure to enhance the MGGP in the medium term.

Warriedar Board Approval

The Warriedar board has unanimously recommended the scheme, in the absence of a superior proposal and subject to an independent expert concluding it is in the best interests of the company’s shareholders.

Warriedar’s two major shareholders, representing approximately 14.5% of the company’s shares, have said they intend to vote in favour of the scheme.

The company’s directors, who together hold 1.9% of the total shares on issue, have also confirmed their intention to vote in favour.

‘Compelling Transaction’

“This is a compelling transaction for all stakeholders, and we believe that combining Capricorn and Warriedar represents a unique opportunity to generate value for shareholders of both companies,” Capricorn executive chair Mark Clark said.

“This acquisition […] adds resource ounces, highly prospective exploration targets, and valuable infrastructure that will further enhance what is clearly one of the best development projects in the Australian gold industry.”

“We believe this transaction is a great outcome for Warriedar shareholders and stakeholders, who will benefit from the development of the GRP as part of an enlarged gold company with an exciting future,” Warriedar chair Mark Connelly added.