Australia-based Kaiser Reef has entered into a definitive agreement with Catalyst Metals to acquire the Henty gold mine and associated exploration tenements in north-western Tasmania in a deal valued at A$31.6m.
Under the deal, Kaiser will make an upfront payment of A$15m and issue A$16.6m in shares, offering Catalyst a 19.99% stake in the company.
The deal also includes deferred payments of 50oz per month, up to a maximum of 3,000oz, a royalty agreement and reimbursement of A$3.9m in environmental bond payments.
Additionally, the agreement includes an option agreement allowing Catalyst to form a joint venture (JV) with Kaiser for the Maldon processing plant in Victoria. The option can facilitate plant expansion and increase the scale of operation.
Following the acquisition, Kaiser’s enterprise value will reach A$67m, encompassing three gold mines, including one under care and maintenance and two gold processing plants.
Kaiser managing director Jonathan Downes said: “Catalyst has done a great job building a profitable operation at Henty over the last four years, with clear production and mine life visibility, plus some great exploration targets.
“Kaiser will continue to re-invest into Henty and build on what Catalyst has already achieved. We are very pleased to have Catalyst’s continued involvement and exposure to the upside at Henty, both as Kaiser’s major shareholder and through their board representation.
“The option for Kaiser and Catalyst to enter into a 50/50 JV partnership at the Maldon processing plant gives both parties a clear pathway that supports their Victorian ambitions. A joint venture can unlock the benefits that would come with plant expansion and increased operational scale, and we look forward to working with Catalyst as JV partners if they execute the option.”
Kaiser has also announced that it has secured binding commitments for A$30m through a two-tranche placement of new shares to fund the acquisition.
The funds will cover the cash consideration and transaction costs and provide working capital for growth initiatives.
The commitments include A$9.1m secured under existing capacity with the remaining A$20.9m pending shareholder approval in May.
An additional A$10m has been secured through a senior secured gold loan and an unsecured prepayment facility with Auramet International.
A general meeting of shareholders is scheduled for early May 2025 to approve the transaction and related funding arrangements.
The Henty gold mine is a gold production platform with a historical yield of 1.4 million ounces at 8.9 grams per tonne (g/t). The current ore reserve of the mine is 1.2 million tonnes at 4g/t for 154,000oz.
The addition of the Henty gold mine is expected to increase Kaiser’s annual gold production to more than 30,000oz, positioning the company as a multi-asset gold producer in the existing high-gold-price scenario.
The company is targeting 50,000oz of gold production per annum in the short term.
In May 2024, Ragnar Metals reached a strategic investment agreement with Kaiser Reef to acquire a stake in the company.
