The Predictive Discovery Ltd (ASX: PDI) share price has jumped 11% after announcing a merger with Robex Resources CDI (ASX: RXR).
The gold mining ASX shares said that they’re merging to create West Africa’s next mid-tier gold producer by combining two of the continent’s largest, lowest-cost and most advanced projects.
Predictive Discovery and Robex Resources gold merger
The combination of the two businesses is expected to lead to a combined production of 400,000 ounces per year of gold by 2029.
The combined mineral resources are expected to be approximately 9.5 million ounces of gold, including 4.5 million ounces of gold ore reserves, with significant exploration upside potential.
The ASX gold shares believe the transaction will “drive economic growth in Guinea, strengthen local labour force, enhance critical infrastructure and services, and build lasting local partnerships.”
Development funding for Predictive Discovery’s Bankan project will reportedly be significantly de-risked thanks to the cashflows from Robex’s Kiniero project and the ongoing exercise of Robex’s in-the-money warrants and options.
The companies believe a tier-1 mining hub in Guinea was established by the proximity of the Bankan and Kiniero projects, located within 30km of each other.
The two businesses believe that enhanced scale, multi-asset portfolio and proposed dual listing will boost the combined company’s capital markets profile and possibly leading to a potential increase of the share prices.
Who will lead the combined ASX mining share?
The two gold miners said that a combined leadership team, led by Andrew Pardey as non-executive chair, with Matthew Wilcox being the CEO and Managing Director. The two gold miners said they possess a proven in-country track record and skill set to develop and operate the combined portfolio.
All directors and certain executives of Robex, as well as two of Robex’s largest shareholders, who collectively own around a quarter of Robex’s shares have entered into voting support agreements with Predictive Discovery.
Final thoughts on the gold merger and Predictive Discovery share price
The gold price is soaring, so longer-term shareholders can be very happy about the market dynamics.
The two businesses can clearly benefit by being combined, with the larger scale that provides. I’m not looking to buy gold miners for my own portfolio, but this merger could be one to watch.
