AFR: WA gold plays Pantoro, Tulla finalise merger, launch $75m cash call

Eastern Goldfields miners and joint venture partners Pantoro Limited and Tulla Resources have hammered out a merger deal and were expected to seek $75 million of fresh equity.

Eastern Goldfields miners and joint venture partners Pantoro Limited and Tulla Resources have hammered out a merger deal and were expected to seek $75 million of fresh equity.

Pantoro would own 51.5 percent of the combined business, while Tulla would have 48.5 per cent, fund manager sources said. The combined entity would be run by Pantoro boss Paul Cmrlec but would split the board positions equally (three each) and bring in a new non-executive chairperson.

The merger has long been tipped in resources circles, primarily because it consolidates the ownership of Norseman gold project’s 4.8 million ounces into a single entity. Talks began in earnest after Christmas, and the combined business was expected to have a $400 million odd market capitalisation.

As a part of the merger, the two would ask equity investors to tip in $75 million of fresh funds via a two-tranche placement run by Euroz Hartleys and Petra Capital. The raise was priced at 6¢ a share, a 31.8 per cent discount to the last close and 36.8 per cent lower than the 10-day volume weighted average price, according to the term sheet sent to potential investors.

The proceeds would help complete the ramp up build at Norseman ($40 million), debt management ($13 million), transaction costs ($10 million), corporate working capital ($7 million), and exploration and reserve growth ($5 million).

Separately, Amicaa Advisers was tasked with rounding up $55 million from the debt capital markets to help roll over existing debt.

Amicaa also worked as the financial adviser to Pantoro on the merger, while Tulla leaned on Azure Capital.

Extracted Source: The Australian Financial Review