Forrestania Resources Raises $310m to Fund Edna May Gold Hub Acquisition from Ramelius Resources

Forrestania Resources (ASX: FRS) has agreed to acquire the Edna May Gold Hub from Ramelius Resources (ASX: RMS) in a $300 million deal designed to fast-track its push into Western Australian gold production.

The acquisition brings Forrestania the 2.9-million-tonnes-per-annum Edna May mill, associated infrastructure, regional satellite tenements, and a 945,000-ounce gold resource package near Westonia.

Forrestania followed the purchase agreement with firm commitments for a $310m two-tranche institutional placement at $0.40 per share to fund the acquisition, refurbishment work, and working capital.

The successful raise has allowed Forrestania to adjust the consideration mix to $210m cash and $90m in shares, rather than the original $200m cash and $100m share structure.

Edna May Deal Terms

Forrestania will acquire Ramelius’ 100% ownership in Tampia Operations and Edna May Operations, together with four additional tenements held at between 75% and 100%.

The revised cash component comprises a $20m deposit and $190m payable on completion, while Ramelius will receive 225 million Forrestania shares based on the placement price.

Ramelius is expected to emerge with a holding of approximately 9.6% in Forrestania, with the shares subject to 18 months’ escrow and a further six-month orderly sale commitment.

Completion, expected in the September quarter, remains subject to shareholder approval for the placement and consideration shares, along with customary third-party and regulatory approvals.

Dual Processing Strategy

Edna May has been on care and maintenance since April 2025, with Forrestania reporting that the plant and infrastructure remain in place.

Forrestania has estimated a low-cost restart at about $50m because the plant will have been idle for less than 18 months by the time it targets recommissioning.

The company is aiming to have Edna May fully commissioned and operational in the first half of 2027, with permits already in place to support a mill restart.

The acquisition complements Forrestania’s Lake Johnston processing facility, where refurbishment is underway and recommissioning is targeted for the December quarter.

Forrestania expects the two mills to provide more than 6Mtpa of combined targeted processing capacity after refurbishment, upgrades, and completion of the Edna May transaction.

Capital Raising Conducted

Forrestania has received binding commitments for approximately 775 million new shares under the $310m placement.

The offer price represents a 5.9% discount to the company’s last closing price of $0.425 on 26 June, an 18.8% discount to the 10-day volume-weighted average price, and a 20.2% discount to the 20-day VWAP.

Tranche 1 will raise approximately $95m under Forrestania’s existing placement capacity, while the approximately $215 m Tranche 2 is subject to shareholder approval at a general meeting expected around late August.

Executive chair David Geraghty has committed to invest $1m in the placement, subject to shareholder approval.

Forrestania will apply the proceeds to the Edna May cash payment, development capital expenditure at Edna May and Lake Johnston, offer costs, and general working capital.

Consolidation Strategy

Mr Geraghty said the acquisition reflected a deliberate consolidation strategy around stranded gold assets and underexplored tenure near Edna May.

“Approximately 12 months ago, Forrestania embarked on an aggressive M&A strategy to consolidate stranded high-quality gold assets and underexplored tenure surrounding Edna May,” he said.

“This strategy has been incredibly successful and set Forrestania up for today’s acquisition.”

Forrestania believes it has the team in place to restart Edna May in conjunction with its commissioning of Lake Johnston, which is on-track for late 2026.

“Forrestania is at an exciting juncture as it now has the growing resource base and the processing infrastructure to deliver on its gold production strategy,” Mr Geraghty added.

Ramelius Retains Exposure

Ramelius produced 760,000oz of gold from Edna May between 2018 and 2025, after acquiring the operation from Evolution Mining (ASX: EVN) in 2017.

The vendor has framed the sale as a portfolio optimisation move that crystallises value from a non-core asset now sitting on care and maintenance.

Ramelius managing director Mark Zeptner said the transaction would allow the company to sharpen its focus on other priorities.

“The transaction realises value for shareholders as we focus on the transformation of Mt Magnet and development of Rebecca-Roe,” he said.

Restart and Growth Path

Forrestania plans to initially supply Edna May with ore from British Hill and Johnson Range, supplemented by existing Edna May stockpiles.

The company is not relying on ore from a Stage 3 Edna May cut-back for the initial restart, although it intends to assess that longer-term mining option.

The broader package includes about 1,000 square kilometres of acquired tenure, including the historical Tampia and Symes projects, with several drilling targets identified for the second half of 2026.

Forrestania will also assess the potential selective reopening of the historical Fuji and Jonathan underground lodes to provide supplementary high-grade feed for the Edna May mill.

Mr Geraghty said the successful capital raising underpinned the acquisition and left Forrestania well placed to advance its dual processing hub strategy.