New signage looks to be in order at the idled Sugar Zone mine, north of White River.
Australian gold miners Vault Minerals, the owners of Sugar Zone, and Regis Resources are merging in an all-stock deal worth A$10.7 billion ($10.4 million Canadian), the two companies reported May 5.
The merged company will produce more than 700,000 ounces of gold annually, in total, from the two companies’ respective mines in Australia. The mothballed and high-grade Sugar Zone mine is Vault’s only offshore asset.
“This merger creates Australia’s third largest primary ASX-listed gold producer, which demands global recognition,” said Regis CEO Jim Beyer in a statement.
Pending a Vault Minerals shareholder vote, the deal is expected to close in either August or September.
When the transactional dust settles and the deal closes in August or September, Regis shareholders will own approximately 51 per cent of the combined company. Vault shareholders will own approximately 49 per cent.
The combined company will stay on as Regis Resources, headquartered in Perth and trading on the Australian Stock Exchange.
This will be the third company name change since Sugar Zone was acquired by Silver Lake Resources in 2022 as part of a CCAA-related sale, following the demise of Harte Gold. In June 2024 Silver Lake merged with Red 5 to form Vault Minerals.
Sugar Zone is not in operation. It’s considered a development project in the company pipeline.
In August 2023, Silver Lake decided to halt mining to step back and get a better picture of the area’s geological structure and to devise a new mine plan on how to mine more efficiently. During the downtime, the company spent millions on new mining, processing and services infrastructure, such as new mobile mine equipment, and put money into the exploration program.
Vault said it will resume underground operations once it snags a provincial permit for a new tailings management facility. That permit is expected to arrive this month. That’ll be the green light to start underground mine development in July and finish construction on the new tailings dam in October 2027.
Gold production is scheduled to resume in November 2027.
At last count, Vault reports that Sugar Zone currently hosts 389,000 ounces of gold in reserves at 5.4 grams per tonne and a measured and indicated resource of 1,278 million ounces of gold at 8.0 grams per tonne. But there are high expectations of discoveries of higher grades that could grow the scale of the underground mine.
The Sugar Zone mine is 30 kilometres north of White River and the Trans-Canada Highway, roughly halfway between Sault Ste. Marie and Thunder Bay. The mine first commenced operations in November 2018 under the Harte Gold flag.