Record gold price drives Ramelius-Spartan $4.2b merger Mark WembridgeResources reporter
Mar 17, 2025 – 1.10pm
Gold’s record-breaking march has prompted another merger of Australian gold miners, with Spartan Resources and Ramelius Resources agreeing to tie the knot in a deal that values the combined group at $4.2 billion.
The price of gold has vaulted past $US3000 ($4750) an ounce for the first time as demand from central banks, global economic uncertainty and US President Donald Trump’s regime of tariffs push investors towards the safe haven of bullion.
Spartan Resources executive chairman Simon Lawson at the Dalgaranga Gold Project in WA’s Murchison region. AFR
The two Western Australian gold miners on Monday agreed a cash and share deal whereby Ramelius would acquire Spartan and form a new company worth $4.2 billion.
If approved by shareholders, the well-flagged deal will join the two miners’ operations, which are focused around Mount Magnet, WA’s oldest gold-mining town.
With a combined resource estimate of 12.1 million ounces, Spartan’s main prospects are its Never Never and Pepper gold deposits, which form part of its misfiring Dalgaranga project. It also operates its Rebecca-Roe standalone project 150 kilometres east of Kalgoorlie.
Dalgaranga produced 70,000 ounces of gold in 2022 before being shuttered due to low-grade ore. However, a series of promising finds and a jump in the gold price have sent Spartan’s shares up from 10¢ in early 2023 to $1.60 last Friday.
The higher quality ore from Spartan’s Dalgaranga mines will be sent to Ramelius’ nearby processing facilities.
“This is a sensible and compelling deal for both sets of shareholders,” said Mark Zeptner, Ramelius Resources managing director. “The combination of Ramelius’ production expertise and financial strength, together with Spartan’s culture of discovery ... will provide an ideal platform for strong shareholder returns.”
“The Never Never and Pepper gold deposits are the jewel in the crown for Spartan, and this transaction allows the processing of these all sources to be fast-tracked and de-risked,” Zeptner said.
Under the terms of the deal, Ramelius will acquire Spartan’s stock for 25¢ in cash and 0.6957 new Ramelius shares, implying a value of $1.78 per Spartan share.
The price equates to a 27.5 per cent premium to Spartan’s average share price over the past month. Northern Star’s $5 billion bid for De Grey offers a 44 per cent premium, while Westgold’s takeover of Karora was at an 18.9 per cent premium.
Spartan shares rose 10 per cent on Monday, while Ramelius stock slipped 1 per cent to $2.18. Ramelius owns a 19 per cent stake in Spartan.
“This is a highly attractive and transformational combination, which we believe represents a great outcome for both Spartan and Ramelius shareholders,” said Simon Lawson, Spartan’s executive chairman who will stay on as deputy chair of the new company.
“We expect the enlarged Mt Magnet-Dalgaranga hub to cement itself as a long-life and low-cost mining operation.”
The deals have been driven by the high price of gold, which is being buoyed by demand for bullion by central banks shifting their assets away from the greenback. After dropping to $US1600 after the COVID pandemic, gold enjoyed a bull run in 2024, rising from $US2050 to $US2900 during the year.
“Despite surpassing the $US3000 milestone, several tailwinds could drive gold prices even higher. Concerns over tariffs and their implications for global growth and inflation are likely to sustain gold buying demand,” said Cameron McCormack, senior portfolio manager at gold-focused investment group VanEck. “We like the prospect of gold miners, which are undervalued relative to the price of gold.”
Australian miners tend to produce gold at an average cost of between $2000-$2800 per ounce – offering them hefty margins at the current price of $4750.
Ramelius last week flagged lower production and higher-than-expected costs and capital expenditure at its Mount Magnet gold mine, dragging its shares down 20 per cent in a day.
Ramelius attempted to acquire Toronto-listed WA gold miner Karora Resources a year ago but lost out to bigger rival Westgold Resources. It also attempted a $3 billion merger with Westgold, but was turned away.
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