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OceanaGold agreed to acquire Ausgold for $549 million, adding the Katanning Gold Project in Western Australia. Ausgold shareholders will mainly receive OceanaGold shares, with a cash option capped at $137 million; closing is expected in December 2026.
Katanning is projected to produce more than 100,000 ounces of gold annually for an initial 10-year mine life, with first production targeted for 2029. OceanaGold plans further development work through 2027, a technical report and final investment decision in 2028, and says permitting and early works are progressing.
The deal expands OceanaGold's growth pipeline and exploration footprint, including more than 3,000 square kilometers of underexplored land. The company said it has $655 million in cash and no debt, and expects the acquisition to proceed without delaying its Waihi North development or Macraes mine-life extension efforts.
OceanaGold (TSE:OGC) said it has agreed to acquire Ausgold Limited, owner of the Katanning Gold Project in Western Australia, in a transaction valued at $549 million.
President and Chief Executive Officer Gerard Bond said the proposed acquisition would add a fifth asset to OceanaGold's portfolio and expand its growth pipeline with a conventional open-pit development project in Western Australia. The company expects Katanning to produce more than 100,000 ounces of gold annually over an initial 10-year mine life, with first gold targeted for 2029.
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"Katanning is exactly the kind of asset we have been looking for," Bond said, describing it as a relatively low-capital project with district-scale exploration potential. He said the company believes its existing technical and project-development capabilities can help realize the project's potential.
OceanaGold plans to acquire all issued and outstanding Ausgold shares through a court-approved scheme of arrangement. Ausgold shareholders will receive OceanaGold shares, with an option to receive cash subject to a $137 million cap.
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Ausgold shareholders are expected to own approximately 6% to 8% of OceanaGold after the transaction closes. The Ausgold board unanimously recommended the scheme, according to OceanaGold, while the board and major shareholder Dundee Corporation, together holding about 9.1% of Ausgold, intend to vote their shares in favor of the proposal.
The transaction remains subject to customary conditions and is expected to close in December 2026.
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Bond said OceanaGold is pursuing the acquisition from a position of financial strength, citing $655 million in cash and no debt. The company projected total cash holdings of about $2.1 billion by the end of 2029, based on its current cash balance, consensus free-cash-flow estimates, buyback commitments and dividend levels.
He said the company expects to fund the potential cash component of the deal and Katanning development while continuing to advance existing growth projects, invest in exploration, pay dividends and maintain its share repurchase program.
Chief Operating Officer Bhuvanesh Malhotra said Katanning is located about 275 kilometers southeast of Perth and has access to established infrastructure, roads, power and a skilled Western Australian labor market.
The proposed processing plant would use a conventional carbon-in-leach circuit. Required site infrastructure includes a 250-room accommodation village in Katanning that is already under construction, as well as offices, workshops, water treatment and tailings facilities.
Malhotra said mining leases are already in place across the development footprint. The project's environmental permitting process is under public review after authorization by the Western Australian Environmental Protection Authority. Early works agreements have been executed, while detailed engineering and long-lead procurement are advancing.
OceanaGold expects to conduct additional development work through 2027, publish an NI 43-101 technical report in 2028, and target a final investment decision and start of construction that year. The company said it is allowing time to optimize the project and further reduce ramp-up risk rather than pursuing the earlier production timing contemplated in Ausgold's study work.
Malhotra said OceanaGold had completed due diligence on the project's metallurgy and was confident in the proposed processing flow sheet. He said the company does not currently anticipate scope changes, but plans to build on Ausgold's work through further optimization.
Chief Exploration Officer Keenan Jennings said a 54,000-meter drilling campaign is underway at Katanning, initially focused on infill drilling and resource conversion in areas expected to support early mining stages. The deposits remain open down dip below the current pit shell, he said, and recent drilling has returned gold intercepts beyond current resource areas.
Ausgold also brings more than 3,000 square kilometers of land in an underexplored greenstone belt. Jennings identified potential regional targets along the Stanley Shear, the Nanicup-Zinger Belt and the Kraken-Yandina area, which could eventually provide satellite deposits for the proposed plant.
In response to analyst questions, Bond said the Katanning acquisition would not delay OceanaGold's Waihi North development, which he said is already in execution mode. He also said the project is independent of efforts to extend the life of the company's Macraes operation into the 2040s.
Bond said OceanaGold will continue reviewing acquisition opportunities, but emphasized that the company has no imperative to pursue additional deals. "We'll only execute where we are highly confident that we can add value to OceanaGold shareholders," he said.
OceanaGold is a global intermediate gold and copper producer committed to safely and responsibly maximizing the generation of Free Cash Flow from our operations and delivering strong returns for our shareholders. We have a portfolio of four operating mines: the wholly-owned Haile Gold Mine in the United States of America ; the wholly-owned Macraes and Waihi operations in New Zealand ; and the 80%-owned Didipio Mine in the Philippines.
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The article "OceanaGold to Buy Ausgold for $549M, Adding Katanning Gold Project" was originally published by MarketBeat.
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