Kula Gold Valued Up to $58.7M in Forrestania’s Strategic All-Scrip Offer

Overview of the Takeover Offer

Forrestania Resources Limited (ASX, FRS) has formally lodged a bidder's statement to acquire all outstanding shares in Kula Gold Limited (ASX, KGD) that it does not already own. The offer is structured as an all-scrip deal, with Kula shareholders receiving one new Forrestania share for every 5.6 Kula shares held. Depending on Forrestania’s share price, this values Kula between approximately $42.7 million and $58.7 million.

The offer is set to close on 8 January 2026, subject to extensions or withdrawal, and is contingent on a minimum acceptance threshold of 50% of Kula’s fully diluted shares. Importantly, Kula’s board has unanimously recommended shareholders accept the offer, provided no superior proposal emerges.

Strategic Rationale and Synergies

This transaction represents a strategic consolidation of gold exploration assets across some of Western Australia’s most prospective gold belts, including Southern Cross, Forrestania, and Eastern Goldfields. Forrestania and Kula hold adjacent and complementary tenements, and the merger is expected to create a larger, better-funded entity with enhanced operational scale and capital efficiency.

One of the key value drivers is accelerated development potential, particularly for Kula’s 80%-owned Mt Palmer Gold Project. Forrestania’s recent conditional acquisition of the Lake Johnston Project, which includes a 1.5 million tonnes per annum processing plant, offers a processing solution for any economically viable gold ore from Mt Palmer. This infrastructure advantage is expected to fast-track project development and unlock near-term value.

Offer Details and Shareholder Impact

Kula shareholders accepting the offer will become shareholders in Forrestania, gaining exposure to a diversified portfolio of gold projects and a management team with a track record of exploration and development. The combined group will hold JORC-compliant gold resources totaling approximately 296,210 ounces, with a strong cash position and no debt as of 30 September 2025.

The offer consideration is fully paid ordinary Forrestania shares, which will rank equally with existing shares. The number of new shares to be issued to Kula shareholders is estimated at approximately 178.9 million, increasing Forrestania’s total shares on issue to around 696.4 million on an undiluted basis. Post-completion, Kula shareholders would hold roughly 25.7% of the combined entity.

Conditions and Risks

The offer is subject to several conditions, including regulatory approvals, no material adverse changes in Kula’s business, and no competing superior proposals. Forrestania reserves the right to waive conditions at its discretion. Shareholders should be aware that the value of the offer depends on Forrestania’s share price, which may fluctuate.

Risks include potential delays or failure in completing Forrestania’s acquisition of the Lake Johnston Project, legal uncertainties surrounding Forrestania’s option to acquire Hyden Project Holdings, and the usual exploration and operational risks inherent in the mining sector. Additionally, if Forrestania acquires between 50.1% and 90% of Kula, minority shareholders may face reduced liquidity and influence.

Next Steps and Market Implications

Kula shareholders are encouraged to carefully review the bidder’s statement and consider the offer before the closing date. Acceptance will require shareholders to tender all their Kula shares. If successful, the merger will create a more regionally consolidated gold explorer with enhanced funding capacity and operational synergies, potentially positioning the combined group for accelerated growth and development in Western Australia’s gold sector.