Two Australian firms to merge into A$523-M gold company

First posted 03:26pm (Mla time) July 11, 2006
XFN-Asia

http://news.inq7.net/archive_article/index.php?ver=1&index=1&story_id=9236

SYDNEY--Oceana Gold Ltd. and Climax Mining Ltd. have agreed to merge to create a 523 million Australian dollar gold mining company.

They said the company, which will retain the name Oceana Gold, was forecast to have annual production of over 550,000 ounces of gold equivalent by 2008 from mines in New Zealand and the Philippines.

Output will include gold, copper and silver.

The pair said the merged company would also have reserves of 4.8 million ounces of gold equivalent.

Under the merger terms, Climax shareholders will receive 0.62 of an Oceana share and 0.31 of an option to acquire Oceana shares for each Climax share held. The share option entitles Climax shareholders to acquire Oceana shares for 0.0925 Australian dollars, with the option maturing in 30 months.

The share offer represents a 27 percent premium to the weighted average share price of Climax over the past 30 days.

Former Climax shareholders will own about 44 percent of the merged company.

Oceana's assets include New Zealand's largest gold mine at the Macraes goldfield, which produces 170,000 ounces a year, and two new development projects that will increase gold production to 300,000 ounces a year by 2008.

Climax's principal asset is the still-to-be-developed Dinkidi gold and copper deposit in Northern Luzon, Philippines.

The project, which gained a development permit last year, is expected to yield an average of 260,000 gold equivalent ounces a year for the first 10 years, comprising 130,000 ounces of gold and 14,000 metric tons of copper in concentrate.

(One dollar = 1.33 Australian dollars)