Gold Road Resources Limited, together with its subsidiaries, engages in the exploration of gold properties in Australia.
Current advice: Await payment
short-term, medium-risk arbitrage opportunity.
Latest Update: 7 October 2025, 9:50 AM
GOR has now ceased trading, and the deal is effectively done. On 14 October, GOR shareholders will be paid the scheme consideration, which totals:
- Cash component of $2.083
- Variable cash component of $0.98117
- Fully franked special dividend of $0.43694 (plus franking credits of $0.1873)
All in all, shareholders will receive gross proceeds of approximately $3.69, representing a premium of 13.5% over our entry price of $3.25. Members held GOR for roughly five months, resulting in an annualised return of over 30%, an excellent return given the low risk of the deal. We will record GOR to the track record on 14 October.
Update: 23 September 2025, 1:00 PM
The acquisition of GOR by Gold Fields was approved by shareholders yesterday, which means that the only remaining obstacle is Federal Court approval (which should be a formality). Conveniently, the pricing period for the variable cash component is this week, so the price of gold (and Northern Star Resources [NST]) has surged at the best possible time. NST is trading just shy of $23.00 at the time of writing, a significant premium to the $19.17 it was trading at when the deal was inked.
Using today’s NST price, the offer is worth roughly $3.57 in cash, plus shareholders will receive franking credits of $0.187 per share. All up, that equates to approximately $3.76, which is a premium of 15.6% on our entry price of $3.25.
GOR is due to cease trading at the end of Friday, and investors are due to be paid on 14 October. We will update members once the final cash consideration is announced.
Update: 19 August 2025, 10:00 AM
GOR released its Scheme Booklet late last week, providing details of the timeline to completion. The scheme meeting is due to be held on 22 September, so we have roughly a month to get in our votes. Assuming everything goes to plan, GOR will cease trading on 26 September, with payment due on 13 October.
There are a few things to note since we bought the stock in May. The variable cash component will be determined by the five-day volume-weighted average price of Northern Star Resources (NST) before the stock ceases trading. Using the current price of NST, the total cash consideration will be $3.34. Additionally, the franking credit balance has grown since our entry (and will likely still grow before the deal concludes), and now stands at roughly $0.17 per share, which will be on top of the cash consideration.
Using the current NST price and the current franking credit balance, the total gross scheme consideration is $3.51, representing a gross return of 8% on our entry price of $3.25, for a hold time of roughly 5 months.
Update: 5 May 2025, 12:00 PM
This morning, GOR announced that it had signed a binding scheme implementation agreement with Gold Fields, which would see GOR shareholders pay a headline price of $3.40 per share. While the entire consideration will be in cash, only $2.52 will be fixed, with the remaining $0.88 in cash subject to changes in the price of Northern Star Resources (NST), in which GOR is a major shareholder. Therefore, roughly 25.9% of the consideration will fluctuate, and there is discomfort initiating exposure to the gold prices near their all-time highs. However, NST is already nearly 20% off its recent highs, and the tailwinds supporting gold stocks are likely to sustain throughout the life of the bid, so it’s a risk we’re comfortable taking at the right GOR price.
Additionally, GOR can pay a full franked dividend to pay out its franking credit balance (with the cash consideration being reduced by the quantum of the net dividend amount). Currently, that would imply a $0.35 fully franked dividend, thus adding $0.15 in franking credits to the scheme consideration, but that number may increase slightly as the deal is expected to take up to six months to complete. At current GOR prices, those franking credits add almost 5% to the final result.
Other than the variable cash component, which could either add to or subtract from the final result, the deal looks rock solid and should be completed without any issues, in the absence of competing bids. Gold Fields has declared the bid as ‘best and final’, so this will be the final offer if no other bidders emerge.
GOR is trading at $3.25, with the cash return equating to 4.6% in roughly six months (we’re expecting five months), just under our minimum hurdle return target of 10%. Adding in the franking credits, the gross return is 9.2%, far above our minimum return target.
Therefore, we recommend members buy GOR at no higher than $3.25 for a short-term, medium-risk arbitrage opportunity. The investment is being classified as medium risk because the consideration is not entirely fixed, but NST would need to drop roughly 20% throughout the life of the bid for our paper profits to disappear, so there is a large margin of safety. Those clients with CFD accounts can short-sell NST shares to hedge the investment, if desired.
