The company will add a land package in the Victorian goldfields in Australia through the acquisition

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White Rock Minerals will be the name of the enlarged company, post-merger. (Credit: Tumisu from Pixabay)

White Rock Minerals has agreed to acquire Australian gold miner AuStar Gold at AUD0.435 ($0.33) per share in an all-stock deal.

The deal gives the Australia-based White Rock Minerals an under-explored land package spanning nearly 670km2 with historic high-grade gold production in the Victorian goldfields.

It will be carried out through a scheme of arrangement, under which AuStar Gold’s shareholders will be issued 0.78 White Rock Minerals shares in exchange of every AuStar Gold share held.

AuStar Gold is engaged in the mining and production of its flagship Morning Star gold mine in Victoria, Australia. Morning Star had historically produced more than 830,000 ounces of gold.

The company’s other asset is the 97.5% owned Rose of Denmark (RoD) gold mine in the Gaffney Creek area. The Rose of Denmark mine is a historic-producing mine, located nearly 15km from the Morning Star mine.

White Rock Minerals said that the deal gives its shareholders exposure to the considerable exploration potential and interest existing in the Victorian goldfields area.

White Rock Minerals chairman Peter Lester said: “White Rock is delighted with the prospect of adding high potential Victorian gold exploration, including a modest production base, in one of Victoria’s most prolific historical gold production regions to its portfolio.

“With the Morning Star mine and processing plant in place, Austar will also move White Rock closer to being a producer and open up exposure to the growing Victorian exploration and mining scene which has enjoyed a considerable resurgence in recent times.”

On the other hand, White Rock Minerals is the owner of the Red Mountain project, a silver-rich zinc volcanogenic massive sulphide mine, and the Last Chance Gold IRGS project, both located in Alaska, US.

In Australia, the company owns the advanced Mt Carrington gold-silver project in New South Wales.

The merger will give the two companies a larger and more diverse asset portfolio spanning two first world jurisdictions. White Rock Minerals will be the name of the enlarged company, post-merger.

AuStar Gold director Paul McNally said: “I am extremely pleased to be announcing this transaction, which delivers for AuStar Gold shareholders a certain path forward to accelerated activity on the Company’s world-class Victorian gold tenements, as well as the benefit of exposure to White Rock’s high-potential exploration and development assets in Alaska and New South Wales.

The scheme of arrangement is anticipated to be implemented in late May 2021. It will be subject to approval of AuStar Gold’s shareholders, court approval, and the satisfaction of the other conditions of the scheme.