Spitfire in tie-up with Aphrodite

Gold junior Spitfire Materials has entered into an agreement to merge with Victoria-based Aphrodite Gold in an all-scrip deal that values the target at about $32 million.

Perth-based Spitfire will pay one share for every 2.9 Aphrodite shares, valuing the gold explorer at 4.45 cents a share.

The deal represents a 93 per cent premium to Aphrodite’s five-day volume-weighted average price.

Spitfire will be acquiring all the shares it doesn’t already own in the target; it currently holds a 10.4 per cent stake in Aphrodite.

As part of the merger, Aphrodite directors Peter Buttigieg and Roger Mitchell will join Spitfire’s board, with the former to become chairman.

Spitfire managing director John Young will remain his position, while Neil Biddle will also retain a board position.

Post-acquisition, the merged entity’s primary focus will be Aphrodite’s self-titled gold project near Kalgoorlie.

The asset, which is at a pre-feasibility phase, also lies close to Spitfire’s Mulwarrie gold project.

“This transaction with Aphrodite provides an exciting platform to fast-track the growth of a significantly enhanced ASX-listed gold company with a strong pipeline of growth assets,” Mr Young said.

“The combination of our WA assets at Aphrodite and Mulwarrie gives us the critical mass to pursue a near-term development strategy based on the potential establishment of a new production hub near the world-class mining centre of Kalgoorlie.

“The large resource inventory at Aphrodite has exceptional exploration upside and growth potential, and offers significant synergies with our emerging discovery at Mulwarrie.

“At the same time, shareholders in the combined group will have exposure to a high-potential discovery opportunity at the Alice River gold project in Queensland, where drilling is set to commence next month.”

Hartleys acted as corporate adviser to Spitfire, with Steinepreis Paganin acting as legal adviser.

GTP Legal acted as legal adviser to Aphrodite.

Shares in Spitfire were 11.5 per cent lower to 11.5 cents each at the close of trade, while Aphrodite shares were 37.5 per cent higher to 3.3 cents.