Gold M&A: Pantoro and Tulla Resources join forces to create a A$400m company

Nick Sundich, February 13, 2023

The gold M&A market for 2023 is officially underway with Pantoro (ASX:PNR) and Tulla Resources (ASX:TUL) agreeing to merge. But are these companies actually better off together?

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Pantoro and Tulla are joining forces

Both companies own 50% each of the 4.8Mo Norseman gold project in WA.

Eerily similar to the situation of Strike Energy (ASX:STX) and Warrego Energy (ASX:WGO), a deal had been been tipped for a long time due to the inefficiency of having two companies on the same project.

Today the worst kept secret was confirmed and investors were asked to chip in $75m of fresh equity. This will fund construction, transaction costs and provide general working capital.

Pantoro will own the majority of the new company – with a 51.5% stake – and the hot seat with CEO Paul Cmrlec (yes, that’s his name) heading the combined entity. The combined company is expected to have a ~$400m market capitalisation.

Is this a sign of good things to come for gold M&A?

This gold M&A deal comes a week after a US$17bn proposal by Newmont, the world’s biggest miner, to buy Newcrest Mining (ASX:NCM). This deal has not been accepted yet. Nevertheless, these deals show that it could be a better year for gold M&A in 2023. Last year, only US$2.5bn of deals were completed, down 86% from 2021. But with US$120bn in gold M&A deals completed over the last decade, investors can be optimistic that the market has capacity to bounce back with a vengeance.