Australian gold producer Silver Lake Resources’ shareholders have given the green light to a merger with domestic peer Red 5.

This approval moves the companies closer to completing the deal through a scheme of arrangement. The merger terms dictate that Red 5 will acquire all shares of Silver Lake.

The next phase involves seeking the court’s endorsement, with a hearing set for 6 June 2024.

Should the court give its nod at this second hearing, Silver Lake plans to make the scheme legally binding by registering the court’s orders with the Australian Securities and Investments Commission the following day.

Trading of Silver Lake shares on the Australian Securities Exchange (ASX) is expected to be suspended from the close of business on 7 June 2024, assuming the scheme receives court approval.

The finalisation of the merger, through the implementation of the scheme, is scheduled for 19 June 2024.

At this juncture, eligible shareholders of Silver Lake are set to receive 3.434 Red 5 shares for each Silver Lake share they own, marking the culmination of the scheme of arrangement.

The deal, announced in February this year, is said to result in the creation of a diversified mid-tier gold company with four mining hubs in tier 1 gold jurisdictions of Western Australia and Ontario.

The merged entity is estimated to have an annual production capacity of 445,000oz for fiscal year 2024.

It will be headed by Luke Tonkin from Silver Lake as the managing director and CEO.