Aurum and Mako to Merge, Will Focus on Gold in West Africa

Aurum Resources (ASX:AUE) and Mako Gold (ASX:MKG) said on Wednesday (October 16) that they have come to an agreement to merge, creating a West Africa-focused gold explorer and developer.

Under the deal, Aurum is proposing to acquire Mako, with the combined company set to have a market cap of AU$90 million and AU$20 million in cash. It will advance the Napié and Boundiali gold projects in Côte d’Ivoire.

According to the companies, the merger will take place through off-market takeover bids. Aurum will bid for 100 percent of Mako's shares and 100 percent of its Class A Options and Class B options.

Aurum shareholders will own approximately 79.5 percent of the new entity once the deal is complete, while Mako shareholders will hold the remaining 21.5 percent. The offer is reportedly a 112 percent premium for Mako shareholders.

“We have always believed our Napié Project has potential to host multi-million ounces of gold, and pleasingly, due to relative sizes of Mako and Aurum, Mako securityholders will remain a meaningful part of the expanded group, and therefore will share in the continued upside to the growth in Napié," said Peter Ledwidge, managing director at Mako.

Napié is Mako's 90 percent owned flagship project. Its Tchaga and Gogbala deposits have an inferred mineral resource estimate of 22.45 million tonnes at 1.2 grams per tonne for 868,000 contained ounces of gold.

Ledwidge also noted that a maiden mineral resource estimate for Aurum's Boundiali asset is expected late this year.

“Between driving growth at Napié and being well on the path to delivery of a maiden resource at our own Boundiali Project later this year, we see strong potential for Aurum to become a strong emerging gold developer in Côte d’Ivoire with two assets with long-life potential in close proximity to each other,” said Dr. Caigen Wang, managing director at Aurum. He added that the companies see "strong similarities" between the two properties.

The firms said shareholders will also benefit from Aurum’s strong balance sheet and drilling efficiencies.

Aurum and Mako noted that the full bid implementation agreement and its terms will be available to the public soon.

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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Aurum Resources is a client of the Investing News Network. This article is not paid-for content.