STAWELL Gold Mines general manager, Troy Cole, has welcomed the announcement of a merger between its current owner Crocodile Gold and Newmarket Gold Corporation.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Mr Cole said the merger would establish a new platform for gold asset consolidation and would go a long way to securing a solid future for the Stawell operation.
Both companies were delighted with the announcement earlier this week, which sees them enter into a definitive arrangement agreement to combine, creating a new gold industry consolidator solidly positioned to acquire high quality gold assets in the world's best mining jurisdictions.
Mr Cole said the combination, known as NewCo, created a strong gold producing company with enhanced capital markets exposure and access to capital, which will be of great benefit to operations such as Stawell.
"NewCo will benefit from Crocodile Gold's strong asset base, established gold production of more than 200,000 ounces per year and track record of free cash flow generation from the Fosterville, Stawell and Cosmo underground gold mines," he said.
"Mergers and acquisitions are common place within our industry and I appreciate that some may see this as uncertainty.
However, we take the position that this merger will provide further capacity to our mining operations enabling realisation of a number of initiatives.
"Newmarket Gold and Crocodile Gold have advised this merger as being " a first step in executing a gold focused consolidation strategy"
Mr Cole said essentially the merging of two entities would see a strong foundation of operations and industry market capacity, which has intent to launch into further growth activity.
He said the company would also have a solid combination of significant board members and industry leaders who would come to the table along with Newmarket Gold.
"We will certainly see some dove tailing within the operations department, as the merged company continues to look at further opportunities," Mr Cole said.
"This merger will bring further investment into all operations and all sites within the group. The company will support new initiatives at these sites.
"Through this merger, there will be the capacity for the company to support further growth within the sites, including Stawell."
One of the most significant projects under consideration at present is the Big Hill Enhanced Development Project proposal.
Mr Cole said the company was still in the process of preparing a modified project for presentation to the state government for consideration.
"Stawell Gold Mines remains committed to the Big Hill project and is currently preparing a Modified Project," Mr Cole said.
"It is strongly supported by its corporate body and will continue to work with government and regulators to determine a path moving forward. Once this is determined, Stawell Gold Mines will inform the community."
Mr Cole said the company had always been clear as to what the Big Hill Enhanced Development Project would entail.
"The proposed Big Hill Enhanced Development Project involves the open-pit mining and full reinstatement of Big Hill adjacent to Stawell," he said.
"Mining would take place in two pits with the original pit being reinstated while mining continued in the second pit.
"Along with the great economic value the Big Hill project will bring to the community, Stawell Gold Mines will continue to work with State and Local Governments to examine ongoing employment and other opportunities. These opportunities will be as a result of mining operations and those opportunities identified through Government initiatives."
Mr Cole said given good financial results over the past few quarters, now was the perfect time for Crocodile and Newmarket to consider a merger.
"It would be fair to say that the resolve of the commercial arrangements between Crocodile Gold and former owner Aurico Gold, in addition to the continued success and opportunities of our collective operations, has brought this merger consideration to the table," he said.
"We see this consideration as providing further capacity for continued mining operations as transitioning works and favourable gold pricing realises further ore contributions to our program.
"Exploration interest has been ongoing over the course of the past 18 months which has provided near term capacity for ongoing operations. Investment for continued minerals interest and exploration undertaking has been a component of our sustainability works as opportunities continue to be explored. Additional capacity to do so will be most welcomed.
"Excluding merger announcements which you will appreciate are subjective to commercial and market sensitivities, these details continue to be advised at our ERC meetings in an open forum and with the intent of advising operations intent to community in good faith.
"Stawell Gold Mines remains committed to the responsible management of project interests and continued mining operations through the realisation of its employees good work in challenging times. We welcome the further support that this company announcement brings to our mining operations and look forward to the possibilities of longer term considerations."