Silver Lake Resources signs bid implementation deed with EganStreet Resources to acquire latter’s issued and outstanding ordinary shares
Image: Silver Lake Resources intends to acquire EganStreet Resources. Photo: courtesy of rawpixel from Pixabay.
Australian gold producer Silver Lake Resources has announced plans to acquire EganStreet Resources in a deal worth $52m.
As part of this effort, the firms have signed a Bid Implementation Deed (BID), which allows Silver Lake to acquire all of the issued and outstanding ordinary shares of EganStreet.
The deal is intended to capitalise on the Rothsay underground gold project located in Western Australia. The project is located approximately 85km south-east of Silver Lake’s Deflector mine and processing hub.
EganStreet’s Rothsay Gold Project is in close proximity to Silver Lake’s operations
Silver Lake managing director Luke Tonkin said: “The acquisition of EganStreet and its Rothsay Gold Project is consistent with Silver Lake’s strategy of creating new opportunities to compete for capital and maximising the value of the existing asset base.
“Silver Lake’s nearby infrastructure at Deflector can unlock additional value at Rothsay and this is reflected in the share price premium offered to EganStreet shareholders.”
Under the terms of the transaction, EganStreet shareholders will receive 0.270 Silver Lake shares for every EganStreet share held.
EganStreet managing director Marc Ducler said: “This transaction will reward our shareholders for the progress achieved at Rothsay to date while giving them exposure to a successful ASX-300 gold producer with a strong balance sheet, diversified production profile, mine development expertise, established systems and practices and installed infrastructure.
“This will significantly mitigate the development risk at Rothsay and provide exposure to a much larger and highly liquid Australian gold producer with the ability to attract an investment premium in the current strong Australian dollar gold market.”
Additionally, EganStreet’s largest shareholder Lion Selection has signed a Pre-Bid acceptance Deed with Silver Lake, accepting the offer in respect of its 16.2% holding.
The acquisition is a part of Silver Lake’s effort to maximise the value of its established operations.
The sale, however, provides for a significant reduction in execution risk for EganStreet on the Rothsay gold project.
The firm considers the project development as no longer to be contingent on the execution of multiple financing transactions.