Rigel Resource Acquisition Corp., a blank-check company listed on the New York Stock Exchange, is reportedly engaged in discussions to merge with a South African gold mining firm, as disclosed by individuals familiar with the matter.
According to these sources, the potential deal might assign a value of up to $425 million (R7.9 billion) to Blyvooruitzicht Gold Mining Company. The individuals, who preferred to remain anonymous due to the confidentiality of the information, emphasized that the details are not yet public.
Rigel, which is supported by Orion Resource Partners—an asset manager overseeing $8.5 billion, has enlisted Citigroup and Rand Merchant Bank to conduct a pre-sale and raise approximately $60 million in early 2024, according to the same sources.
Despite requests for comments, Blyvooruitzicht, Citigroup, Rand Merchant Bank, and Rigel have refrained from providing official statements on the matter.
The ongoing discussions carry no assurance of a successful deal, as highlighted by one of the sources. Previously, Rigel had announced the signing of a non-binding letter of intent for a business combination in the global metals sector, withholding specific details about the target.
Special purpose acquisition companies (SPACs), or blank-check entities, have attracted notable figures in the mining industry, such as Robert Friedland, founder of Ivanhoe Capital Acquisition Corp., and African Gold Acquisition Corp., which secured $360 million to focus on gold mining assets.
A potential challenge for SPACs involved in mining ventures is the constrained timeframe for deploying funds raised through the listing. Conducting thorough due diligence and vetting a mine can be time-consuming, limiting the available time for deployment.
Rigel had previously sought an extension for the period designated to “consummate an initial business combination,” extending it by a year from August 9, according to a company notice.
Blyvooruitzicht, as indicated on its website, currently produces 40,000 ounces of gold annually, with a projected mine lifespan of 22 years.
