OceanaGold Corporation (OGC,OGC.TO), a gold explorer and miner, said that it has entered into a scheme implementation deed to acquire Ausgold Limited (AUC.AX), the owner of the Katanning Gold Project in Western Australia.

Under the terms, Ausgold shareholders will receive 0.03365 shares of OceanaGold for each Ausgold share. The scheme consideration implies a total offer value of A$1.36 per Ausgold share, which implies a total value of around A$776 million. This A$1.36 per share is based on OceanaGold's last closing price of C$39.74 per share and the AUD:CAD exchange rate of 0.9833 on August 14.

Post transaction, Ausgold will own around 6% to 8% of OceanaGold.

Gerard Bond, CEO of OceanaGold, said: "The acquisition of Ausgold adds an advanced, high-quality, low-capital, open-pit development asset to our portfolio at an attractive valuation. The Katanning Gold Project will be our fifth asset, located in one of the world's premier mining jurisdictions and is a natural fit with our proven development and operating capabilities."

Katanning is a conventional open-pit development project with over 100,000 ounces of annual gold production and more than 10 years of potential life. Ausgold also holds landholding of over 3,000km² across the largely underexplored Katanning greenstone belt.

The transaction is expected to add to the earnings per share of OceanaGold once Katanning achieves commercial production.

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