PERTH (miningweekly.com) – Gold juniors Dacian Gold and NTM Gold have announced a merger that would consolidate landholding in Western Australia.

Under the terms of a scheme of arrangement, Dacian would acquire all of the issued capital in NTM. NTM shareholders would receive 1 Dacian share for every 2.7 NTM shares held.

Dacian shareholders would ultimately hold a 68.4% interest in the merged entity, with NTM shareholders holding the remaining 31.6% interest.

The transaction implied an offer price of 14.1c a share for NTM, based on Dacian’s 30-day volume weighted average price, and a 26.1% premium to the 30-day volume weighted average price of both companies.

In conjunction, outstanding NTM options will also be exchanged for new Dacian options, at the 2.7 exchange ratio.

The companies said in a joint statement on Monday that the merger would combine two complementary Western Australian gold companies, leveraging Dacian’s operational expertise and processing infrastructure to unlock the potential development of NTM’s Redcliffe gold project, through regional consolidation.

The Redcliffe gold project, which is currently estimated to host some 679 000 oz of gold, lies within 100 km of Dacian’s Mount Morgans gold operation.

“This merger will create value by delivering on our strategy of extending mine life, diversifying our production base and increasing operational flexibility at Mount Morgans. This is a logical step for Dacian to expand operations in our region by unlocking resources within haulage distance of our substantial processing infrastructure, enabling future resource and reserve additions to be brought quickly into production,” said Dacian MD Leigh Junk.

“The merger with NTM creates an industry leading portfolio of advanced exploration targets underpinned by potential high margin, low capital intensity development opportunities which would significantly expand Dacian’s production profile through the addition of high-grade deposits to our operating plan, further future proofing our business.”

NTM MD Andrew Muir told shareholders that the transaction was compelling, and provided the financial, processing and operating strength to unlock the value of the Redcliffe gold project.

“The transaction is an outstanding opportunity for NTM given the proximity of both companies’ assets and delivers to NTM shareholders immediate exposure to gold production while still enabling them to benefit from future exploration success at both Redcliffe and Mt Morgans.”

The NTM board has unanimously recommended that shareholders vote in favour of the scheme, in the absence of a superior proposal, and subject to an independent expert finding that the scheme was in the best interest of shareholders.

NTM’s directors, an its two largest shareholders Empire Resources and DGO Gold, which represent a combined 32.9% interest in the company, intended to vote in favour of the transaction.