PERTH (miningweekly.com) – ASX-listed Metminco has signed a binding bid implementation agreement with Colombia-focused Andes Resources to enact a merger agreement reached in March this year.
Under the terms of the off-market agreement Metminco would issue 25 of its own shares for every Andes share held, with the merger to be conditional on a number of conditions, including a minimum 90% acceptance and the completion of a A$4-million capital raise.
“This transaction is transformation for both Metminco and Andes, providing Metminco with further exposure to a large exploration portfolio in the Mid-Couca goldbelt of Colombia, access to an experienced board, management, and a new shareholder base of influential, experienced and financially strong shareholders, and providing Andes with exposure to Metminco’s Quinchia and Chuscal gold projects,” said Metminco’s executive chairperson Kevin Wilson.
Andes’ largest shareholders, including Sandfire Resources and Bullet Holding Corporation, which own a 19.4% and 16.2% respective interest in the company, have supported the merger. The company’s directors, who collectively own a 21.5% interest in Andes, have also expressed their support for the offer.
The unlisted Andes holds a portfolio of gold/silver/copper exploration projects in the Cauca Valley, in Colombia, which is in close proximity to Metminco’s existing mineral resource of some 877 000 oz of gold and reserves of 457 000 oz at its Miraflores deposit, as well as its Tesorito prospect and the large undrilled Chuscal target, which is in joint venture with gold miner AngloGold Ashanti.
In conjunction with the merger, Metminco will also undertake a share consolidation at a ratio of 1-for-30, and will convert some A$2.5-million of repayment due to RMB Australian Holdings into equity in the company, at a price of 0.3c a share, with an improved repayment schedule for the final A$2-million due to RMB in order to minimise the burden on the company’s cashflow.
In support of the merger, Metminco will also undertake a capital raise of some A$2.33-million, at a price of 0.2c a share, subject to the completion of the merger.
Sandfire Resources has confirmed that it would subscribe for some A$990 000 in new Metminco shares under the capital raising, resulting in the company potentially being a 15% interest holder in Metminco, at the close of the merger and capital raise.