South African gold producer Aurous, which owns and operates the Blyvoor gold mine and the Gauta tailings retreatment project on Gauteng’s West Rand, has announced plans to go public through a business combination with US-based Rigel Resource Acquisition Corp.

The transaction, which puts Aurous at a pre-money equity value of some R6.76-billion ($362-million), is expected to enable Blyvoor to expand its underground infrastructure, enhance surface infrastructure, and optimise operations through economies of scale.

“This transaction and associated influx of foreign investment into South Africa has the potential to enable further meaningful job creation, continued revitalisation of the local community and recapitalisation of Africa’s precious metals industry, all of which we expect will be well received by the relevant South African authorities,” Aurous CEO Richard Floyd stated in a release to Engineering News & Mining Weekly.

Aurous is described by Rigel CEO Jon Lamb as a cash-positive, debt-light target that already has impressive operational milestones under its belt.

Making up Aurous are Blyvoor Gold Resources and Blyvoor Gold Operations and New York-listed Rigel is a special-purpose acquisition company sponsored by a fund managed by Orion Resource Partners. The two companies have entered into a definitive business combination agreement that will result in Aurous becoming publicly traded.

On completion of the proposed business combination, which is subject to customary closing conditions and regulatory approvals, the resulting company is expected to be named Aurous Resources and is to ultimately list on NASDAQ.

Floyd and Aurous executive chairperson Alan Smith will continue to lead the business, the principal asset of which, the Blyvoor mine, is a long-life underground gold mine in the Witwatersrand region, west of Johannesburg.

Since the restart of Blyvoor production in 2022, Aurous has been able to re-employ some 1 500 workers who had been unemployed following closure of the mine in 2013.

“We’ve worked diligently over a few years to find a quality business to combine with and are pleased to have arrived at this merger agreement which is expected to deliver a value-accretive transaction to all stakeholders,” Rigel president Nate Abebe noted.

Rand Merchant Bank is acting as financial adviser to Aurous and Milbank LLP and ENS as legal counsel to Aurous.