A MERGED WCB Resources Ltd and GBM Resources Ltd would have a major focus on developing the Misima project in Milne Bay Province, according to the two companies.
The Australian and Canadian minerals companies recently announced plans to merge to allow them to focus on gold development and exploration in PNG and Australia.
Upon completion of the merger, WCB shareholders will hold 36% and GBM shareholders will hold approximately 64% of the merged entity.
“The complementary nature of the two companies’ projects creates a strong platform for both companies’ shareholders to benefit from a substantial value uplift from a significant increase in combined gold resources at Misima and Mt Coolon, and the ability to step up exploration within the group’s extensive landholding,” GBM’s executive chairman, Peter Thompson, said.
“GBM’s board believes that this transaction is in the best interest of GBM and unanimously recommends it to our shareholders, in the absence of a superior proposal.
“We also look forward to welcoming WCB president and CEO, Cameron Switzer to the Board of the combined entity as an executive director, where his strong, long-term understanding of the Misima Gold Mine will prove invaluable,” Mr Thompson said.
Mr Switzer said the significant exploration upside identified at both the Misima and Mt Coolon project in Australia has the potential to ensure that the merged company has an exciting future with significant growth optionality moving forward.
The combined entity will have an impressive gold resource base comprising WCB’s Misima Island project containing an Indicated Resource of 1.3 million ounces of Au plus an additional 0.4 million ounces of Inferred gold Resource and GBM’s Measured Resource of 6,200 ounces of Au, Indicated Resources of 173,800 ounces of Au and Inferred Resources of 134,800 ounces Au across all projects.
The new entity will be fully funded to achieve gold production at Mt Coolon in 2017 and support the ongoing exploration strategies of both the Misima and Mt Coolon Gold Projects.
Mr Thompson said both Misima and Mt Coolon have the potential to be mid-tier gold production assets with significant discovery upside.
He said the immediate focus of the group will include completion of a gold resource update to include recent surface extensions and controls on mineralisation, pit optimisation sensitivity and financial studies followed by drill testing for resource extension, geotechnical and metallurgical parameters at Misima.
Both companies have the highly experienced Pan Pacific Co., Ltd (PPC) as their joint venture partners.
Once GBM has secured the required debt funding of A$8.5million, then WCB and GBM will execute the Arrangement Agreement.
In addition to other customary conditions and regulatory approvals, the Arrangement Agreement is conditional upon GBM obtaining all necessary shareholder and regulatory approvals.
The Merger is subject to the approval of both GBM and WCB shareholders.