Rigel Resource Acquisition Corp. in Talks to Combine with Blyvooruitzicht Gold Mining Co. in $425 Million Deal

Accident – death – Obituary News : Rigel Resource Acquisition Corp., a blank-check company listed in New York, is reportedly in talks to merge with Blyvooruitzicht Gold Mining Co., a South African gold miner, according to sources familiar with the matter. The deal, if successful, could value Blyvooruitzicht at up to $425 million. The sources requested anonymity as the details have not been made public yet.

Rigel, backed by Orion Resource Partners, a money manager with $8.5 billion in assets, has hired Citigroup Inc. and Rand Merchant Bank to conduct a pre-sale and raise approximately $60 million in early 2024, the sources said. Blyvooruitzicht, Citigroup, and Rand Merchant Bank declined to comment on the matter, while Rigel did not respond to emailed requests for comment. It should be noted that the negotiations are ongoing, and there is no guarantee that a deal will be successfully concluded, according to one of the sources.

Previously, Rigel had announced that it had signed a non-binding letter of intent for a business combination with a company in the global metals sector, without disclosing the target. This potential merger with Blyvooruitzicht aligns with Rigel’s previous statement.

Special purpose acquisition companies (SPACs), also known as blank-check companies, have attracted prominent players in the mining industry, such as Robert Friedland, who established Ivanhoe Capital Acquisition Corp., and African Gold Acquisition Corp., which raised $360 million to pursue gold-mining assets.

However, SPACs investing in mining assets face a challenge due to the limited timeframe to deploy the funds raised through the listing. It takes time to secure, complete due diligence, and assess the viability of a mine. In fact, Rigel had previously requested an extension for the time it had to “consummate an initial business combination,” extending it by a year from August 9, according to a company notice.

Blyvooruitzicht, according to its website, currently produces 40,000 ounces of gold per year, with a projected mine life of 22 years.

In conclusion, Rigel Resource Acquisition Corp. is reportedly in discussions to merge with Blyvooruitzicht Gold Mining Co., a South African gold miner, in a deal that could value the latter at up to $425 million. While talks are ongoing, it remains uncertain whether a successful deal will be reached. SPACs investing in mining assets face time constraints in deploying funds, and Rigel had previously requested an extension for its initial business combination timeframe. Blyvooruitzicht is currently producing 40,000 ounces of gold annually, with a projected mine life of 22 years.

©2023 Bloomberg L.P..