PERTH (miningweekly.com) – ASX-listed junior Brumby Resources has reached an agreement to acquire private zinc developer Marindi Metals for 250-million of its own shares, as well as 25-million options.
Marindi was currently earning a 100% interest in the Newman base metals project, in Western Australia, on which more than A$15-million had historically been spent on exploration.
The project is estimated to host a Joint Ore Reserves Committee-compliant resource of three-million tonnes, grading 5% zinc, 1.6% lead and 15 g/t silver at the Prairie deposit, and a potentially much larger lead/zinc/silver prospect at the Wolf prospect, some 2.6 km along strike.
The Newman project would be added to Brumby’s portfolio, which included the McArthur base metals project, in the Northern Territory, on which Canada’s Teck has an option.
Following the merger transaction, Marindi executive Ross Ashton and Joe Treacy would join the Brumby board as chairperson-elect and MD respectively, while current Brumby chairperson Geoff Jones and John Hutton would remain on the board as nonexecutive directors.
“We are delighted to have secured the opportunity to merge with Marindi through a transaction which will immediately reposition Brumby at the forefront of the Australian zinc industry,” said Jones on Monday.
“Marindi has assembled an exceptional zinc and base metal portfolio in the Newman base metals project, which offers a unique combination of existing resources with growth potential at the Prairie deposit, and emerging large-scale discovery at the Wolf prospect, and district-scale exploration potential for world-class base metal deposits.”
Jones said that the transaction gave Brumby shareholders the opportunity to be part of the "unfolding Australian zinc story at the perfect time in the investment cycle".
“The Newman base metals project is ideally positioned to develop a very large base metal resource portfolio over the next one to two years, and establish the foundation for a significant zinc producer in the medium term.”
In conjunction with the merger, Brumby also flagged plans to undertake a A$3.75-million capital raise, comprising a A$1.25-million share placement and a A$2.5-million entitlement issue.
Some 125-million shares would be placed at 1c each to raise the initial capital, while the entitlement issue would be undertaken on a one-for-two basis, and also priced at 1c each.
Free attaching options would also be issued on a one-for-two basis and would be exercisable at 2c each by December 2016.
Jones said that the capital raising would ensure that the merged entity was well capitalised to pursue an exploration and development programme at Marindi’s flagship asset.
The merger was subject to a number of conditions, including shareholder and regulatory approval.