News: WGX Westgold Resources And Karora Resources Agreed To Combine In A Merger, page-55

Here's an analysis of the sp dip. Looks temporary as merger should produce much better results. Time to buy the dip and watch it bounce.

• DATAROOM EDITOR
• 4:55PM APRIL 8, 2024
• NO COMMENTS

Wayne Bramwell’s grand plans for Westgold Resources look to be finally coming to fruition with his $2.2bn merger with Karora but some believe it’s come at a cost.

One of the conditions of the transaction that the seasoned mining executive likely agreed to begrudgingly was creating a dual listing on both the Australian Securities Exchange and Toronto Stock Exchange.

Karora is TSX listed and is likely to have insisted on this condition to appease its own shareholders, which would not want to own stock in an exchange that does not trade in the same time zone.

Companies don’t like such arrangements, because shareholders either flock to one exchange or the other, causing the stock on one of the markets to struggle.

Other cases where Australian miners are listed both here and in Canada are African gold miner Perseus and Patriot Battery Metals.

Westgold has been talking to Karora for over a year.

The view around the market is that it’s a big price that Westgold has agreed to and now has to prove itself with its ambitious plan to take its production level to 500,000 ounces of gold annually.

But if it pulls it off, it will mean it is the third largest gold miner in Australia.

So far it has impressed, with the once embattled Westgold Resources soaring in value from $300m to over $1bn under Mr Bramwell’s leadership.

And one of the reasons it is interested is it believes Karora had been producing 170,000 ounces of gold, when it should have been producing about 200,000, as it had earlier forecast.

Gold miners are cashed up on the back of the buoyant gold price.