South African gold miner Aurous is set to go public through a merger with special purpose acquisition company Rigel Resource Acquisition.
Aurous owns and operates the Blyvoor gold mine and the Gauta tailings retreatment project, which is located on Gauteng's West Rand in South Africa.
This business combination agreement gives Aurous a pre-money equity value of $362m and is expected to provide the company with a minimum of $50m in capital.
The deal, which includes $7.5m of committed PIPE (private investment in public equity) financing from institutional and strategic investors, along with nearly $278m from Rigel’s trust account, is anticipated to close in the second half of 2024.
The resulting company is expected to have debt levels of around $6m at the close of the transaction.
The net proceeds will be used to further invest in the Blyvoor Mine, aiming to boost production growth and reduce operating costs.
Rigel’s non-redeeming shareholders are expected to receive shares in the new entity, RRAC Newco (NewCo) and cash, provided the cash in Rigel’s trust account exceeds $10 per share at the transaction's close.
The boards of directors of both the companies have unanimously approved the deal, which is now pending the approval of Rigel shareholders, the Financial Surveillance Department of the South African Reserve Bank and other customary closing conditions.
Upon completion, the merged entity is expected to trade as Aurous Resources and be listed on the Nasdaq stock exchange.
Aurous anticipates benefitting from healthy gold prices, organic production growth, optimisation projects and the development of the Gauta Tailings project.
The company also expects to leverage mergers and acquisitions opportunities and maintain a debt-light balance sheet.
Aurous CEO Richard Floyd said: “This transaction represents one of the first significant gold industry deals in South Africa in some time and is expected to enable Blyvoor to expand its underground infrastructure, enhance surface infrastructure and optimise operations by achieving economies of scale.
“With the support of our investors and banking partners, we expect to reach our operational targets and unlock the next stage of growth for Aurous. Since the restart of production from the Blyvoor Mine in 2022, Aurous has been able to re-employ approximately 1,500 workers who had been unemployed following closure of the mine in 2013.”
