THE BOURSE WHISPERER: IMX Resources (ASX: IXR) (TSX: IXR) has entered into a non-binding heads of agreement (HoA) with OZ Minerals (ASX: OZL).
The HoA covers the proposed sale of IMX’s 49 per cent interest in the Mt Woods copper-gold Joint Venture to OZ Exploration, a wholly owned subsidiary of OZ Minerals.
IMX and OZ Exploration are currently partners in the Mt Woods copper-gold Joint Venture, under which OZ Exploration has committed to spend $20 million over 5 years to retain a 51 per cent interest in the non-iron rights on IMX’s Mt Woods tenements in South Australia.
Mt Woods copper-gold Joint Venture. Source: IMX Resources web page
As at 30 September 2012, OZ Exploration has spent approximately $14 million of the $20 million.
Under the terms of the new HoA, and subject to execution of binding transaction documents and various approvals and consents, OZ Minerals has agreed to pay IMX $5 million cash.
The deal is sweetened further, upon the required IMX shareholder approvals being obtained and completion of the transaction, with IMX and OZ Minerals agreeing to cancel the 33.9 million IMX ordinary shares held by OZ.
This will be completed with no cash consideration to be payable by IMX to OZL for that cancellation.
As a result, IMX expects to issue 33.9 million replacement shares in the coming days to new investors.
The company said the issue of these new shares to off-set the share cancellation will mean total funds derived from the sale, share cancellation and capital raise will be approximately $8.7 million.
Assuming the deal is completed and IMX shareholders approval is obtained, no overall increase in issued capital or dilution to existing shareholders will result.
Until such time as shareholder approval is obtained and completion occurs there will, however, be an intervening period where the issued capital will increase above the 362 million shares currently on issue.
“This agreement provides an elegant and equitable solution to the dissolution of the Mt Woods Joint Venture with OZ Minerals and allows both parties to walk away winner,” IMX Resources managing director Neil Meadows said in the company’s announcement to the Australian Securities Exchange.
“IMX receives a significant injection of cash and we smoothly manage the exit of a major shareholder from our register and introduce new investors through a placement, without any dilutionary impact on our existing shareholders.”
A heads of agreement has been signed but is non-binding until IMX and OZL complete the transaction documentation, which IMX indicated is expected to occur before the end of November 2012.