[miningmx.com] — GOLD ONE INTERNATIONAL LIMITEDon Wednesday confirmed it is to proceed with spin-off plans for its Megamine assets, which will be housed in a JSE-listed development company Goliath Gold Mining.
Goliath Gold will be created through the reverse acquisition of WHITE WATER RESOURCES LIMITED by Gold One, which will own 74% of the new entity.
The main reason for a separate listing is that Megamine’s resources were deeper and therefore riskier than Gold One’s other assets, notably its shallow depth Modder East flagship.
Located in the east of Johannesburg, Megamine comprises the Sub Nigel mine and the Vlakfontein, West Vlakfontein and Spaarwater prospecting areas, totalling 16,056 hectares. Gold One issued a resources update for the project on Monday, stating audited resources of 12.65 million ounces.
Megamine will be vended into White Water Resources in return for 1.05 billion White Water Resources shares of 25c each, putting a price tag of R262m on the transaction.
“The transaction maintains Gold One’s focus on developing its shallow low cost ounces as well as its strong operational cash flows, while unlocking value in Gold One’s deeper resources,” said Gold One CEO Neal Froneman.
“White Water Resources was chosen as a suitable vehicle as the company has, over the past few years, restructured itself into a focused resource company whose assets are contiguous to those of Gold One’s.”
White Water Resources CEO Waron Mann added: “White Water Resources anticipates that the transaction will be beneficial to its shareholders, as it begins to consolidate a prospective gold province and provides them with access to a greater resource base as well as excellent management experience and expertise in exploration, development and mining.”
Existing shareholders of White Water Resources will own 26% of the new entity. A 20:1 consolidation of White Water Resources’ shares has also been proposed.
As a result of the transaction, Gold One will be required to make a mandatory offer to White Water Resources shareholders. To this effect, Gold One will offer one Gold One ordinary share for every 12 pre-consolidations White Water shares held.
The transaction is expected to be concluded by the end of the first half of 2011 and is subject to a number of terms and conditions.
