THE BOURSE WHISPERER: Metallica Minerals (ASX: MLM) announced it has entered into a binding Arrangement Agreement (AA) to merge with TSX_V-listed Melior Resources.
Metallica Minerals said the merger would be via a Plan of Arrangement to be approved by the court in British Columbia, Canada.
The company intimated the merger will create a diversified Queensland mining company with near term production and a strong pipeline of future growth opportunities, boasting a strong portfolio of assets located in Queensland, which has a stable and well-established regulatory regime.
The merging entities believe their complementary mineral sands and bauxite projects, together with project proximity and combined management expertise, provide the opportunity for both sets of shareholders.
The merger is to be implemented by way of a Canadian Plan of Arrangement, whereby Metallica has agreed to acquire all issued capital of Melior by the issue of 20 new Metallica shares for every 1 Melior share held.
Announcing the deal, Metallica said the merged entity will have an enhanced capital markets profile, a strengthened investor base and a strong pipeline of growth assets, positioning it to become a strong new ASX-listed mining company well situated to take advantage of the favourable outlook for mineral sands and bauxite.
“This is a transformational deal for both companies,” Metallica Minerals chairman Peter Turnbull said in the company’s announcement to the Australian Securities Exchange.
“Melior’s Goondicum ilmenite project shares similar attributes to Urquhart Bauxite in that it is fully funded and will be brought into production relatively quickly for a modest capital outlay and will provide a valuable source of near-term cash flow.
“We look forward to combining the respective skills of the two companies to successfully develop those projects and pursue further growth opportunities to build a significant, profitable mining house generating excellent returns for shareholders.”