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OceanaGold to buy Ausgold in A$776M deal for first Australia entry

The offer values Ausgold at A$1.36 per share, a 27.7% premium, and OceanaGold says the Katanning project should support about 500,000 ounces of annual output until its New Zealand project ramps in 2033.

Reported · Written up by our desk · Mining

OceanaGold will expand into Australia by acquiring gold developer Ausgold for A$776 million, nearly $553 million, in its first purchase of an Australian asset. The deal gives OceanaGold control of the Katanning gold project in Western Australia.

Under the terms, the offer values Ausgold at A$1.36 per share, representing a 27.7% premium to Ausgold’s Friday close. Shareholders will receive 0.03365 OceanaGold common shares for each Ausgold share, with an option to take cash instead, and Ausgold investors are expected to own about 6% to 8% of OceanaGold after the transaction closes.

OceanaGold’s CEO Gerard Bond said the acquisition marks its first entry into Australia and is intended to build on Ausgold’s work to optimize Katanning’s development. Ausgold’s board has unanimously recommended approval, with major shareholder Dundee, which holds a 7.7% stake, indicating it will vote in favor of the transaction.

The transaction is scheduled to close in December, subject to shareholder approval and customary closing conditions. Katanning is about 275 km southeast of Perth, and Jefferies expects the project to start production in 2029 and ramp to more than 100,000 ounces per year over a mine life exceeding 10 years, supported by 1.25 million ounces of reserves, with initial capital of A$355 million.

Latest closeGold $4,432.00 ▲1.6%

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