Gallery Gold, which operates the Mupane mine in Botswana, will be swallowed by Toronto-based IAMGold, which is capitalised at $US1.1 billion ($1.46 billion) and has stakes in four producing gold mines located in Mali and Ghana.
Gallery shareholders, who will end up with a 15 per cent stake in IAMGold, are being offered the equivalent of 46c a share, against a Monday closing price of 37c. They finished yesterday at 42.5c.
The deal is for one IAMGold share for 22 Gallery counters, with the Canadian company planning to list its Chess depositary interests on the Australian Stock Exchange.
This leaves Resolute Mining as the only substantial gold miner operating in Africa - it has the Golden Pride mine in Tanzania - with its sole listing on the Australian boards. But even this company is expected to pursue a dual listing in Canada when it needs to raise the money for its Syama project in Mali.
The other appeal for Resolute is that Canadian investors would value its reserves at about triple their present rating.
Paladin Resources, which is about to mine uranium in Namibia, is also now listed in Toronto.
The key is the need for the amounts of money simply not available to smaller mining companies here.
This is why Red Back Mining (Ghana gold) and two companies with projects in the Democratic Republic of Congo - Anvil Mining and Moto Gold Mines have shifted their domicile to Canada. So too has Equinox Minerals which on Monday launched a $C127 million ($146 million) raising for its
Zambian copper project.
Fat Prophets analyst Gavin Wendt said Gallery would now be on the global
investment radar as the new company would have combined gold production of more than 500,000oz a year. He believes Gallery has long been undervalued.
