Westgold to spin out mining assets, launch IPO on ASX

Westgold Resources (ASX, TSX: WGX) plans to spin off its non-core gold exploration assets in the Murchison region of Western Australia into a new company that will be listed on the Australian Stock Exchange.

The move will allow Westgold to focus on its larger and higher-grade operating assets while creating a team to advance early-stage projects through funds raised in a future initial public offering, the miner said in a press release on Monday. The new company will be named Valiant Gold.

Included in the spinout are Reedy’s and Comet — two 100%-owned brownfield assets with a combined mineral resource of 15.6 million tonnes grading 2.4 grams per tonne gold, for 1.2 million oz. of contained gold. Both projects were previously in production, churning out 820,000 oz. at 3.8 grams gold per tonne and 257,000 oz. at 2.77 grams per tonne respectively, before being placed under care and maintenance in fiscal 2023.

“We see value in Comet and Reedy’s, but as they are not assets of scale, they are unlikely to be redeveloped by our team in the next three years,” Westgold managing director and CEO Wayne Bramwell said in the press release.

Spinning out Comet and Reedy’s would be a “capital efficient model” allowing Valiant to fast-track these projects, according to the Westgold executive.

Shares of Westgold, one of Australia’s biggest gold miners, fell 4.8% to C$5.33 Monday in Toronto Stock Exchange trading. That cut the company’s market capitalization to about C$5 billion ($3.6 billion).

Demerger details

Under the proposed IPO, Valiant intends to raise between A$65 million ($43 million) and A$75 million at an issue price of A25¢ per share. Following completion, Westgold will keep a 48% stake in Valiant at the minimum subscription, and approximately 44% at the maximum.

Westgold will provide Valiant with an interest-free loan of A$3 million to support early works on the demerged assets. This will give Valiant the “flexibility to progress quickly on key projects, setting the stage for future development and success,” Westgold said.

The spinout is expected to be completed by late March 2026.

Reedy’s and Comet don’t contribute any production included in Westgold’s three-year outlook.

Westgold holds a tenure of more than 3,200 sq. km across the Murchison and Southern Goldfields regions, operating six underground mines and four processing plants with an installed processing capacity of more than 6 million tonnes a year.

Past model

Westgold and Valiant will also enter into an ore processing agreement (OPA) on market terms at the Cue and/or Meekatharra processing hubs in Western Australia.

This access will give Valiant a fast-tracked and low-capex pathway to near-term gold production and cash flow, while providing Westgold with additional ore not built into its three-year outlook, the company said.

“This collaborative, capital-efficient model is proven, as demonstrated by Westgold’s investment and OPA with New Murchison Gold” (ASX: NMG), said Bramwell. “This model saw NMG transition from explorer to producer, with gold production from NMG’s Crown Prince deposit now delivering high-grade oxide ore to Westgold’s Meekatharra processing hub.”

“Valiant can replicate this success. With several small underground mines in care and maintenance, a range of open pit opportunities, and exploration upside, the Valiant team has multiple near-term restart and growth options to deliver near-term cash flow,” he added.

The new company will be led by managing director Brendan Tritton, who previously held leadership roles with Mincor Resources NL’s Kambalda operations. Derek La Ferla, an experienced corporate lawyer and current chair of Chalice Mining (ASX: CHN), will serve as chairman.