Western Australia-based Vault Minerals and Genesis Minerals have sealed a multibillion-dollar tie-up, after the former agreed to be taken over.
Genesis had been eyeing Vault for a while and only managed to knock out a rival WA bidder, Regis Resources, on Monday.
"This is a perfect pairing," chair Raleigh Finlayson, who will become managing director of the merged group, told a briefing on Tuesday.
The new-look company will have a market value of around $12.6 billion, making it the third-biggest listed gold miner headquartered in Australia, behind Northern Star Resources ($31.7 billion) and Evolution Mining ($26 billion).
It will also join the world's top 20 gold miners, setting it up to attract more global investors looking for companies with yellow metal scale and cashflow.
"We are creating a globally relevant vehicle," Mr Finlayson said.
The merged company's trading volumes are expected to lift to around $70 million a day, from around $35 million for each entity now, he added.
Under the takeover offer, Vault shareholders will get 0.7629 Genesis scrip and 47.5 cents in cash for each share held, equivalent to $5.274 per share and a 15.7 per cent premium to its last closing price.
That compares to Regis' offer of 0.6974 new shares for every Vault share held, equivalent to $4.61 per Vault share, which was initially billed as a "merger of equals".
However, Regis will be entitled to a break fee of about $51 million after Vault initially agreed to the offer in May, only to reject it in favour of the last-minute Genesis play.
Genesis expects to reap around $2 billion worth of savings, or synergies, from the combined assets after tax, rising to $1.5 billion pre-tax over 10 years.
This will mostly come from consolidating the miners' neighbouring operations in the Leonora-Laverton district in northern WA, where Genesis holds the landmark Gwalia underground mine and the Tower Hill and Ulysses deposits and Vault has its King of the Hills mine and processing hub.
The jewel in the crown for Genesis is the low-cost King of the Hills plant, which will soon be taking ore from its one million-ounce Tower Hill open-pit gold deposit.
"To be clear, this merger is not a fix-it job," Mr Finlayson said.
"All mines across both portfolios are running well.
"Ultimately, we want to get buy-in from the entire workforce.
"With the gold price coming off and cost inflation, we feel it's really important to have our workforce thinking like owners because they are owners."
The price of gold has fallen sharply since its all-time high of $US5,589.38 an ounce in January, driven by global economic uncertainty and geopolitical tensions, and is now trading around $US4,000.
Earlier this month, investment bank JP Morgan revised down its end-of-year gold price target to $US4,500 an ounce, from $US5,243, although it remains bullish over the longer term.
The new-look Genesis is expected to produce up to 700,000 ounces of gold a year, which would be worth an estimated $A4.2 billion based on the spot gold price.
It will have 9.4 million ounces in gold reserves and 34 million ounces in resources - the second largest in Australia.
Genesis will get the keys to Vault in November, pending a majority vote by the target's shareholders in favour of the merger.
Genesis shares ticked 0.9 per cent higher to $5.93 in afternoon trading, while Vault picked up 0.3 per cent to $4.93. Regis added 0.4 per cent to $6.49.
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