Forrestania Resources and Zenith Minerals are set to merge, establishing a major Western Australian-focused exploration and development company with a portfolio of assets spanning the Southern Cross, Forrestania and Eastern Goldfields’ belts.
Under a binding takeover deed, Forrestania has agreed to a recommended off-market takeover bid for all the ordinary shares in Zenith.
Zenith shareholders will receive one new Forrestania share for every 4.3 Zenith shares held. The transaction implies an offer value of approximately 13.2 cents per share, valuing Zenith at roughly AU$93.5 million.
Zenith’s board has unanimously recommended that shareholders accept the deal in the absence of a superior proposal. The board believes the transaction represents an attractive strategic and financial outcome for shareholders, allowing them to retain exposure to the future value of Zenith’s assets.
The new entity is expected to create a stronger and more diversified Western Australian focused gold company with increased market relevance and liquidity.
The merger brings new scale to the Consolidated Dulcie Gold Project, where Zenith recently defined an Inferred Mineral Resource of 21.3 million tonnes at 1 grams per tonne for 675,000 ounces of gold across a six-kilometre mineralised corridor.
Zenith Managing Director Andrew Smith said the combination provides shareholders with a regional operating platform capable of accelerating project development.
“The board believes the combination with Forrestania provides Zenith shareholders with exposure to a larger and more diversified gold company, with enhanced funding capacity, technical capability and a regional operating platform,” Smith said.
Forrestania Executive Chairman David Geraghty added that the deal aligns with the company’s strategy of disciplined, value-accretive regional consolidation.
“The combination of Forrestania and Zenith brings together complementary gold assets within the Forrestania Belt and is consistent with our strategy of disciplined, value-accretive regional consolidation,” he said.
The deal is subject to a 50.1 per cent minimum acceptance condition and other customary regulatory approvals. Eligible Zenith shareholders may also access capital gains tax (CGT) scrip-for-scrip rollover relief if Forrestania successfully acquires 80 per cent or more of the company’s total shares.
