PERTH (miningweekly.com) – ASX-listed juniors Heron Resources and TriAusMin have agreed to a merger to create an ASX- and TSX-listed company focused on the development of TriAusMin’s Woodlawn polymetallic project, in New South Wales.

Under the merger agreement, TriAusMin shareholders would receive one Heron share for every 2.33 TriAusMin shares held. Heron would further invest A$1.3-million in TriAusMin by means of a convertible loan to provide short-term working capital.

The merged entity would have a cash balance of some A$36.4-million, as well as A$5.4-million in investments, and would allow shareholders of the merged entity to benefit from progressing the Woodlawn project to a bankable feasibility stage and production decision, without potentially requiring further capital.

The directors of TriAusMin have unanimously recommended that shareholders vote in favour of the transaction, in the absence of a superior proposal.

Heron told shareholders that the merger provided the company with a major development asset strongly aligned with the company’s strategic focus, while providing TriAusMin with the necessary funds and complementary team to enable it to progress with the next stages of the Woodlawn project development.

The transaction also allowed all shareholders to benefit from capital growth potential, driven by the proposed investments in Woodlawn, and exposure to a high potential and historically proven high-grade base metals deposit.

The Woodlawn project consists of an underground project, as well as a tailings retreatment project. The mine historically produced some 13.4-million tonnes of high-grade zinc, lead and copper ore, and retains an indicated Joint Ore Reserves Committee-compliant resource of 8.6-million tonnes, grading 10.3% zinc, 4% lead and 1.8% copper, 84 g/t silver and 0.5 g/t gold, along with an inferred resource of 1.5-million tonnes.

The project received regulatory approvals in July last year.

Apart from developing the Woodlawn project, the merged entity would also continue Heron’s work on investigating technologies for ore process routes that could improve the economics of the Kalgoorlie nickel project, and would have large exploration holdings in both New South Wales and Western Australia.

The exploration assets were being considered for both divestment and possible spin-out.

The proposed merger was subject to shareholder and regulatory approval.