Join our daily newsletter At The Bell to receive exclusive market insights
- Dacian Gold (DCN) and NTM Gold (NTM) are set to join forces under the materials sector’s latest merger
- Both West Australian gold companies announced their consolidation today in a deal which values NTM stock at 14.1 cents per share
- Under the offer, Dacian will buy all of NTM, trading one DCN share for every 2.7 NTM shares held
- After both explorers merge, the new entity will carry over 813 million shares and a $284.6 million market capitalisation
- Financially speaking, the consolidation will come with a $43.7 million cash balance, along with $39.1 million in debt
- Overall, the merged group will host 45.4 million tonnes of mineral resource and 16.9 million tonnes in ore reserves
- Following the news, Dacian Gold shares dropped a slight 1.43 per cent to 34.5 cents, while NTM soared 42.1 per cent to trade for 12.5 cents
Two West Australian gold companies are set to join forces under the materials sector’s latest merger.
Dacian Gold (DCN) and NTM Gold (NTM) announced their consolidation today,
NTM’s board has already recommenced investors embrace the merger and vote in favour of the deal.
The fine print
Under the merger, Dacian will buy all NTM shares. In exchange for the buyout, NTM investors will receive one Dacian share for every 2.7 NTM shares held. Any company options will be traded in the same fashion.
Overall, that values NTM stock at 14.1 cents per share — an implied 26.1 per cent premium based on the 30-day volume-weighted average price (VWAP) of both companies.
Once the scheme implementation deed (SID) goes through, Dacian stakeholders will hold 68.4 per cent of the new entity, while NTM investors will carry a 31.6 per cent stake.
In terms of leadership, Dacian’s Managing Director and Chairman will remain at the helm, while NTM Director Eduard Eshuys will also join the board. More broadly, NTM’s exploration staff will all stay on in their roles.
If all goes to plan, both companies should execute the SID today and implement the scheme in early March.
The new company
After both explorers merge, they’ll trade under Dacian’s current ticker code — DCN. The new entity will carry over 813 million ordinary shares and a $284.6 million market capitalisation.
Financially speaking, the consolidation will come with a $43.7 million cash balance, along with $39.1 million in debt. The entity is projected to carry a $280 million enterprise value.
In terms of production, Dacian and TMT’s merger will bring together 45.4 million tonnes in mineral resource, hosting a 1.88 grams per tonne average gold grade. Based on those statistics, the combined resource is set to contain over 2700 thousand ounces of gold.
Looking at the entity’s ore reserves, the merged group will hold over 16.9 million tonnes at a 1.39 grams per tonne average grade for 754 thousand ounces of gold.
Beyond the merger
Once the SID is implemented, the merged group will explore across 1300 square kilometres in WA’s Lenora-Laverton district. Both companies believe the merger positions them to explore a range of advanced targets and grow their mineral resources.
“This merger will create value by delivering on our strategy of
extending mine life, diversifying our production base and increasing operational flexibility at Mt Morgans,” Dacian Managing Director Leigh Junk said today.
“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,” he continued.
NTM Managing Director Andrew Muir echoed his comments, calling the deal a compelling transaction.
“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,” Andrew stated.
Following the news, Dacian Gold shares dropped a slight 1.43 per cent to 34.5 cents, while NTM soared 42.1 per cent to trade for 12.5 cents at 1:48 pm AEDT.
