Australian gold producer Silver Lake Resources yesterday said that it will buy Integra Mining for A$4224 million ($446 million), and aim to create the largest gold producer in the country.
Perth-based Silver Lake is offering 1 new share for every 6.28 of Integra, or 45.2 cents a share, a 44-per cent premium to Integra's last closing price on 3 August.
The proposed deal will see Integra shareholders holding 40 per cent of the enlarged Silver Lake, whose market capitalisation will be nearly $1 billion.
The combined company will create a major Australian gold producer with reserves of 6.6Moz, current production of 200,000 ounces annually and double it to 400,000 ounces a year by 2014.
Since both miners' Mount Monger and Randalls gold projects in the Eastern Goldfields of Western Australia lie adjacent to each other, the merger will bring in synergies through shared infrastructure and economies of scale.
The enlarged Silver Lake will have two mills with 2.2Mtpa of annual milling capacity in the same region, diversifying risk and allowing for optimisation of production strategies, said Silver Lake in a statement.