PERTH (miningweekly.com) – ASX-listed Catalyst Metals is continuing with its acquisitions campaign, announcing plans to acquire TSX-V-listed Superior Gold.

Catalyst and Superior Gold have agreed to merge via a Canadian Plan of Arrangement which has been unanimously recommended by the Superior board. Under the terms of the agreement, each Superior shareholder will receive 1 Catalyst share for every 2.8 Superior shares held.

The offer implies a value of C$0.44 a share to Superior shares, and values the company at C$55-million. The offer represents a 62.8% premium to Superior’s last closing price on February 22 and a 64.4% premium to its 15-day volume weighted average share price.

The transaction will give Catalyst access to the Plutonic gold mine, in Western Australia, which hosts a 5.9-million ounce resource, three-million-tonne-a-year processing capacity, and an annual production of 70 000 oz of gold.

Catalyst said that the Superior Gold transaction, in conjunction with its successful acquisition of ASX-listed Vango Mining, provided a compelling opportunity to unlock and maximise value from the Plutonic-Marymia gold belt, and to support the growth of a new high-grade midtier gold mining company on the ASX.

Catalyst has moved to the compulsory acquisition of the remaining shares in Vango Mining, which owns the Marymia gold project, which is adjacent to the Plutomic operation and has a resource of one-million ounces, including a high-grade component of 517 000 oz at 8.2 g/t gold.

Under the A$66-million takeover offer, Vango shareholders will receive five Catalyst shares for every 115 Vango shares held. The offer implies a value of 5.2c to each Vango share held, representing a premium of 19.1% to the company’s last closing price and a 30.2% premium to its five-day volume weighted average share price.

On successful completion of both the Superior transaction and Catalyst’s acquisition of Vango, Superior shareholders will own approximately 23% of the enlarged Catalyst.

“This is the transaction that Superior and Catalyst shareholders have been looking for. It is a logical consolidation that offers significant potential for operating synergies while also lowering risk,” said Catalyst MD James Champion de Crespigny.

“The combination of the large resources, big processing capacity and considerable exploration upside gives the combined group genuine scale, long mine life, strong cashflow and outstanding growth prospects, all in the heart of a world-class gold belt in Western Australia. We think this will better appeal to all investors.

“The Plutonic Gold Belt is significant by any world measure. It has historically hosted high-quality deposits, i.e. Timor was over 800 000 oz at 7.5 g/t. This consolidation joins the high-grade Trident and K2 ore bodies, which have 517 000 oz at over 8 g/t gold, and significant potential to grow, with underutilised infrastructure.

“The industrial logic makes sense to all parties.”

The enlarged Catalyst will control three high-grade, highly prospective gold assets, including the enlarged Plutonic-Marymia project, a large tenement package in Victoria, and a strategic tenement package in Tasmania.

Superior president and CEO Chris Jordaan said the company was pleased to offer shareholders the opportunity that had been long proposed, namely the consolidation of the Plutonic-Marymia gold belt, with a meaningful immediate premium, diversification of assets and cash flow, and logically, a listing on the ASX.

“We believe the Transaction will create a strong platform from which to advance the development of the Plutonic underground mine and surrounding openpit projects,” Jordaan said on Friday.

“Shareholders will also benefit from Catalyst’s strong Australian shareholder register, financial strength and portfolio of exploration projects. We would like to thank our indigenous partners, the Jiddi-Jiddi and Gingirana, for all of their support. I am confident that, when completed, this transaction will mean an even stronger future for Plutonic. Catalyst will bring to Plutonic a team with international mining experience, a proven track record of exploration success and the financial resources to develop the district.”

The Superior transaction is subject to a number of conditions, including Superior shareholder approval and the necessary regulatory, stock exchange and court approvals.

The agreement would also require Catalyst to raise A$20-million in financing within 30 days of the agreement, with the pricing and timing of the capital raise yet to be determined.

Catalyst said that its shareholder and joint venture partner Hancock Prospecting had agreed to continue to support the company by maintaining its pro-rata shareholding in Catalyst through the capital raise.