Rox Resources says ‘YES!’ to Marindi Metals 21M Reward offer

THE BOURSE WHISPERER: Rox Resources (ASX: RXL) has accepted a revised offer from Marindi Metals (ASX: MZN) for the company’s interest in the Reward zinc-lead project.

Having fielded a number of competing offers, Rox ultimately accepted Marindi’s revised $21 million offer for Reward.

The principal commercial terms of the offer include:

Cash of $8 million;

$4 million worth of ordinary shares in Marindi, to be issued at the same price at which Marindi intends to undertake a capital raising to facilitate the proposed transaction;

210 million three year convertible notes with a total face value of $5.25 million (2.5 cents per note), convertible into Marindi ordinary shares or redeemable by Marindi for face value plus accrued interest at 10 per cent per annum (see Appendix for more details); and

A deferred payment of $3.75 million, payable on completion of a bankable feasibility study, or the expiry of six years, whichever comes first.

“Monetising the Reward project has been a long process, however I’m delighted with this outcome,” Rox Resources managing director Ian Mulholland said in the company’s announcement to the Australian Securities Exchange.

“If either the Marindi offer successfully completes or Teck pre-empts, Rox will be well funded for the foreseeable future and under the Marindi offer will have a substantial investment in a company with a first class Board and management team, together with a high quality zinc project portfolio.”

Rox explained that completion of the transaction with Marindi is conditional upon a number of matters, including:

Rox having first offered its interest in the Reward project to Teck Australia Pty Ltd, which is a requirement under the terms of the partner’s current Earn-in and Joint Venture Agreement, and Teck not accepting the offer; and

Marindi completing a capital raising to fund the offer. Marindi has provided Rox with a letter of support from Argonaut Securities to underwrite the proposed capital raising; and

Marindi and Rox receiving requisite approvals from their shareholders to complete the transaction.

Marindi has recommended its shareholders vote in favour of the transaction and capital raising while Rox will also be required to obtain approval from its shareholders.

Rox has also recommended its shareholders vote in favour of the transaction – in the absence of a superior proposal.

Rox said the initial $8 million in cash payment will provide funding for the company to progress its other projects, including the Fisher East nickel sulphide project, and new opportunities, without undue dilution of shareholders for the foreseeable future.