Integration Risks Loom as Ramelius Moves to Acquire Spartan Resources

Background and Transaction Overview

Spartan Resources Limited (ASX – SPR) and Ramelius Resources Limited (ASX – RMS) have entered into a binding Transaction Implementation Deed under which Ramelius proposes to acquire all issued shares in Spartan that it does not already own. The acquisition is structured primarily as a scheme of arrangement, with a fallback off-market takeover offer should the scheme not proceed.

Under the proposed transaction, Spartan shareholders will receive $0.25 in cash plus 0.6957 new Ramelius shares for each Spartan share held. As of the last practicable date, this consideration implied a value of approximately $2.18 per Spartan share, representing a premium of over 36% to Spartan’s closing price prior to the announcement.

Key Dates and Approvals

The scheme meeting is scheduled for 10 – 00am AWST on 11 July 2025, to be held both in person at the Parmelia Hilton Perth and online via the Spartan Share Registry platform. The meeting will be chaired by Spartan Executive Chairman Simon Lawson or, failing him, Non-Executive Director Mark Hine.

For the scheme to be implemented, it must be approved by at least 75% of votes cast and a majority in number of Spartan shareholders present and voting, excluding certain excluded shareholders. Following shareholder approval, the scheme requires court approval, which is expected to be sought on 21 July 2025.

Board and Expert Recommendations

The Spartan Board has unanimously recommended that shareholders vote in favor of the scheme, subject to there being no superior proposal and the independent expert continuing to conclude that the scheme is in the best interests of shareholders. The Board also recommends accepting the takeover offer if the scheme fails or is terminated.

BDO Corporate Finance Australia Pty Ltd, the independent expert, has concluded that the scheme is fair and reasonable and in the best interests of Spartan shareholders in the absence of a superior proposal. The expert’s report, included in the transaction booklet, supports the transaction’s valuation and rationale.

Strategic Rationale and Synergies

The combined entity will become a leading Australian-focused gold producer with a pro forma market capitalization of approximately $5.3 billion. The merger brings together highly complementary assets located in Western Australia’s tier-1 jurisdictions, including Spartan’s high-grade Dalgaranga Gold Project and Ramelius’ established Mt Magnet Operations.

Operational synergies are expected from integrating Spartan’s Dalgaranga operations with Ramelius’ Mt Magnet processing plant, enabling accelerated and de-risked development of the Dalgaranga project. The combined group will benefit from increased operational flexibility, rationalization of corporate and site costs, and a strengthened balance sheet supporting growth and exploration.

Risks and Considerations

While the transaction offers significant strategic benefits, shareholders should be aware of risks including integration challenges, development and operational risks, fluctuations in gold prices and currency exchange rates, and potential delays in regulatory approvals. The value of the scrip consideration depends on Ramelius’ share price at implementation, which may fluctuate.

Tax implications vary by shareholder, with potential capital gains tax rollover relief available to Australian resident shareholders if certain thresholds are met.

Looking Ahead

Shareholders’ votes at the scheme meeting will be pivotal in determining the future ownership and strategic direction of Spartan. The transaction, if approved, will mark a significant consolidation in the Australian gold mining sector, creating a larger, more liquid, and more investable gold producer with enhanced growth prospects.