By Rhiannon Hoyle

Ramelius Resources wants to acquire Spartan Resources to create a larger gold-mining company that's more appealing to investors, in a deal that values Spartan around 2.4 billion Australian dollars (US$1.5 billion).

Ramelius proposes paying 25 Australian cents in cash and 0.6957 of a new Ramelius share for each Spartan share, the companies said in a joint statement on Monday. The implied value of A$1.78 per share is an 11% premium to the gold explorer's closing price of A$1.60 on Friday.

The proposal has been made against a backdrop of surging gold prices. Gold on Friday surpassed US$3,000 a troy ounce for the first time ever, benefiting from uncertainty around U.S. tariff policies that sparked a rush into assets perceived as least risky.

The Australian gold companies said that, together, they could be "a larger, more liquid and more investable gold producer."

The combined group would have a proforma market value of around A$4.2 billion, they said. It would aim to be producing more than 500,000 ounces of gold annually by fiscal year 2030.

The board of Spartan has unanimously recommended Spartan shareholders support the deal. Its investors--excluding Ramelius, which has an existing 20% stake in Spartan--would own nearly 40% of the combined company.

Spartan owns the Dalgaranga gold project in Western Australia. It is near Ramelius's Mt. Magnet mine, where recent production plans have fallen short of analyst expectations. Acquiring the high-grade Dalgaranga deposit will supercharge the Mt. Magnet operation, said Ramelius Managing Director Mark Zeptner.

"The combination will see Mt. Magnet deliver higher ounces, at higher grade, with higher margins," he said.

The companies said they expect to be able to make cost savings, in part by removing duplicate corporate expenses.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

March 16, 2025 19:03 ET (23:03 GMT)

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