Ramelius to Acquire Spartan in $2.4B Merger, Creating Mid-Tier Gold Giant

About Ramelius Resources Limited And Spartan Resources Limited

Ramelius Resources Limited (ASX: RMS) is a prominent Australian gold producer listed on the Australian Securities Exchange. Established in 1979, Ramelius has built a reputation for successful exploration, development, and mining operations across Western Australia. The company’s portfolio includes significant assets such as the Mt Magnet Gold Mine, the Edna May Gold Mine, and the Marda Gold Project. Ramelius has consistently demonstrated operational excellence, achieving steady production growth and maintaining a robust balance sheet. As of 31 December 2024, the company reported a net cash position exceeding $500 million, providing a strong foundation for strategic acquisitions and expansions.

Spartan Resources Limited (ASX: SPR) is an emerging Australian gold mining company with a focus on exploration and development projects in Western Australia. The company’s flagship asset is the Dalgaranga Gold Project, which encompasses the high-grade Never deposit. Spartan has invested significantly in expanding its resource base and enhancing processing capabilities at Dalgaranga. The company’s strategic vision includes leveraging its exploration expertise to identify and develop high-quality gold assets, aiming to deliver substantial value to its shareholders.

Details Of The Merger Agreement

On 17 March 2025, Ramelius Resources and Spartan Resources announced a binding agreement wherein Ramelius will acquire all outstanding shares of Spartan that it does not already own. The transaction is structured as a cash and share deal, offering Spartan shareholders $0.25 in cash and 0.6957 Ramelius shares for each Spartan share held. This implies a valuation of $1.78 per Spartan share, representing a premium of approximately 11.3% to Spartan’s last closing price of $1.60 on 14 March 2025.

The merger values Spartan at approximately $2.4 billion on a debt-free basis. Post-transaction, Spartan shareholders will own approximately 39.5% of the combined entity, reflecting the significant contribution of Spartan’s assets to the merged company’s portfolio.

Strategic Rationale And Synergies

The merger is poised to create a leading mid-tier gold producer with a robust asset base and enhanced operational capabilities. One of the key strategic benefits is the increase in production capacity. The integration of Spartan’s Dalgaranga Gold Project with Ramelius’s Mt Magnet operations is expected to boost annual gold production, targeting over 500,000 ounces by the fiscal year 2029-30. The merger will also deliver significant operational synergies, combining the processing capacities of both companies to achieve an installed processing capacity of approximately 4.4 million tonnes per annum, enhancing ore throughput and efficiency.

The combined entity will also benefit from an enhanced resource base. Together, the companies will have gold reserves of approximately 2.6 million ounces, providing a solid foundation for sustained production and growth. Financially, the merged entity will have a pro-forma market capitalisation of around $4.2 billion and a robust balance sheet, positioning it well to pursue further growth opportunities and withstand market fluctuations.

Market Context And Timing

The merger comes at a time when gold prices have reached record highs, driven by global economic uncertainties and increased demand for safe-haven assets. In late October 2024, Australian-dollar gold prices surpassed A$4,240 per troy ounce, reflecting a significant surge over the past year. This favourable market environment has spurred consolidation in the gold mining sector, as companies seek to capitalise on high gold prices and achieve economies of scale.

Leadership And Governance

As part of the merger agreement, Spartan’s Executive Chairman, Simon Lawson, will join the Ramelius board as Non-Executive Deputy Chair. This appointment is expected to bring valuable insights and continuity, facilitating a smooth integration of the two companies. The leadership team is committed to ensuring a seamless transition and maximising value creation for shareholders.

Path To Completion

The merger is subject to customary conditions, including regulatory approvals and the approval of Spartan shareholders. Both companies have expressed confidence in the strategic merits of the transaction and are committed to working collaboratively to achieve a successful integration. The merger is anticipated to be completed in the second half of 2025, following the fulfilment of all necessary conditions.