FULL DISCLOSURE: This is sponsored content for Rua Gold.
Rua Gold Inc. (TSXV: RUA) has announced updated terms for its acquisition of Reefton Resources, a wholly-owned subsidiary of Siren Gold Ltd. (ASX: SNG). The amended terms involve key financial adjustments designed to enhance the value of the transaction for both parties. The acquisition centers on the historic Reefton Goldfield in New Zealand, a significant gold-producing region dating back to the late 1800s.
Under the revised agreement, Rua Gold will purchase 10,000,000 shares of Siren Gold at a price of A$0.20 per share, representing a capital investment of A$2 million. This marks a key amendment to the original terms, adding financial depth to the transaction and underscoring Rua Gold’s confidence in the long-term value of the Reefton assets.
The full value of the amended transaction now stands at A$22 million (approximately $20.4 million). This includes:
- A$2 million ($1.8 million) in cash, with A$1 million already paid and the remaining A$1 million to be delivered upon closing;
- A$2 million ($1.8 million) in cash, exchanged for 10,000,000 shares of Siren Gold;
- 83,927,383 fully paid shares of Rua Gold, valued at A$18 million ($16.6 million), to be issued to Siren Gold at the close of the transaction, subject to agreed contractual resale restrictions.
These amendments reflect Rua Gold’s commitment to the acquisition, as the increased cash component strengthens Siren Gold’s financial position while offering Siren shareholders greater security and upside potential.
Several critical conditions for the transaction have already been satisfied, moving the deal closer to finalization. Rua Gold shareholders have voted in favor of the acquisition, and New Zealand’s Petroleum and Minerals authority (NZPAM) has granted approval for the transfer of control over Reefton’s exploration permits to Rua Gold.
Furthermore, the TSX Venture Exchange (TSXV) has conditionally approved the transaction, with final approval contingent upon the submission of an independent National Instrument 43-101 technical report.
The last major hurdle is the Siren Gold shareholder vote, set for October 28, 2024. If approved, the transaction is expected to close in November, solidifying Rua Gold’s position as a dominant player in the Reefton Goldfield.
Upon completion, Siren Gold will own approximately 26% of Rua Gold, giving it a significant stake in the future success of the Reefton Project. Siren’s Non-Executive Chairman, Brian Rodan, is set to join Rua Gold’s board, further aligning the interests of both companies and ensuring a smooth integration of the Reefton assets.
Rua Gold’s CEO, Robert Eckford, described the deal as a pivotal moment not only for the company but for the broader mining sector in New Zealand.
“This transaction opens a new chapter in the development of the Reefton Goldfield, with a focus on combining historic high-grade mines with new exploration opportunities,” he said. “We are confident that this merger will deliver substantial value to shareholders and to the Reefton community as a whole.”
Eckford highlighted that New Zealand’s mining industry is benefiting from favorable governmental policies, improved regional infrastructure, and strong local and international investment. Rua Gold’s acquisition is poised to capitalize on this momentum, as the company plans to accelerate exploration activities and position itself as a leading gold producer in the region.
With the final Siren Gold shareholder vote just days away, the amended terms provide a clear path to closing the transaction. The enhanced financial package has been well received by both Rua and Siren shareholders, with Siren’s board delaying the vote from its original date of October 19 to October 28, giving shareholders more time to consider the updated offer.
FULL DISCLOSURE: Rua Gold is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover Rua Gold on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
