Australian Securities Exchange (ASX)-listed Westgold Resources has received approval from Australia’s Foreign Investment Review Board (FIRB) to acquire all the shares of Karora Resources through a court-approved plan of arrangement.

The company noted that it secured written confirmation from the FIRB stating that the Australian Commonwealth Government has no objection to the deal under the Foreign Acquisitions and Takeovers Act 1975 (Cth).

Both companies’ boards have unanimously approved the transaction. This deal is expected to close on or around 31 July 2024, subject to the clearance of Karora shareholders as well as final court orders.

Karora will seek the green light from its shareholders at its annual general and special meeting, scheduled for 19 July 2024.

Westgold entered a definitive arrangement agreement for the deal in April 2024, with an aim to create a mid-tier gold mining company with a capacity to produce 400,000oz of gold annually.

Under the agreement, Karora shareholders will receive 2.524 shares of Westgold, A$0.68 in cash and 0.30 of a share in SpinCo, a new company to be demerged from Karora. Upon completion of the transaction, Westgold shareholders will own 50.1% of the combined business, with former Karora shareholders owning a 49.9% stake.

SpinCo will receive a bundle of assets from Karora, including a 22.1% stake in Kali Metals, a 1% lithium royalty, A$6m ($4.04m) in cash, along with rights to a deferred payment from the Dumont asset sale.

The merged entity will have a market capitalisation of nearly A$2.2bn.