Spitfire Materials Ltd. and Aphrodite Gold Ltd. have agreed to merge, with Spitfire to acquire Aphrodite's issued capital it does not already own via a scheme of arrangement. Spitfire has a 10.38% stake in Aphrodite.
Under the binding terms sheet, which is subject to various conditions including completing mutual due diligence and a merger implementation agreement by Aug. 25, Aphrodite shareholders and Spitfire shareholders will each hold about 50% of Spitfire upon completion of the deal.
Aphrodite shareholders will receive 1 Spitfire share for approximately every 2.9 shares held, representing an acquisition price of 4.49 Australian cents per Aphrodite share as well as an 87% premium to Aphrodite's Aug. 11 closing price, according to the Aug. 14 statement.
The new board will include John Young, Spitfire's managing director, and Neil Biddle, a director on the company's board, as well as Aphrodite's Executive Chairman Peter Buttigieg and nonexecutive director Roger Mitchell. Young will continue as managing director of the merged company, and Buttigieg will serve as nonexecutive chairman.
The merged company's portfolio will include Aphrodite Gold's namesake Aphrodite gold project in Western Australia, for which an updated resource estimate was reported in June as part of a pre-feasibility study, along with Spitfire's early stage Mulwarrie gold project near Aphrodite and its early stage Alice River gold project in Queensland, Australia, where an initial drill program is scheduled to start in September.
Spitfire and Aphrodite are planning to conduct drilling focused on expanding resources at Aphrodite and defining an initial resource at Mulwarrie, with drilling scheduled to resume at Mulwarrie shortly.