Two Australian gold miners announced plans to merge today to form a company with a market capitalisation of $90 million. Baker & McKenzie worked on the deal.
Unity mining has merged with Cortona Resources, advised by Baker & McKenzie partner Richard Lustig and senior associate Yasmine Gardner.
The gold business will sit under the Unity banner.
The merger will see Unity operate Henty Gold Mine in Tasmania. The merged company said the merger will provide “substantial cash holding” with Cortona’s near term development Dargues Reef Gold Project in New South Wales.'
The companies said the merger will provide the financial and operational strength to underpin the development of Dargues Reef, reflecting Unity’s strong cash reserves, production and cash flow from Henty and a credit approved $42 million funding package.
The said the merger offers a combined growth profile showing production increasing from around 50,000 ounces per annum to around 100,000 ounces per annum once Dargues Reef achieves full production.
The merger may also provide a material market re-rating, by addressing Cortona’s current funding uncertainty, and because it positions the merged company for the near term development of Dargues Reef. It should also increase market and investor relevance, as a result of enhanced critical mass, and grow market capitalisation and improve liquidity.