PERTH (miningweekly.com) – ASX-listed exploration junior Malagasy Minerals has agreed to a merge with unlisted Madagascar Resources (MRNL) to create a diversified Madagascar-focused resource company.

Malagasy was offering three of its own shares for every one MRNL share held, as well as half an option, exercisable at 20c a share, within a four-year term, for every three Malagasy shares issued.

The proposed merger would combine Malagasy’s prospective portfolio of copper, nickel/copper/platinum-group metals (PGMs) and vanadium exploration assets, with MRNL’s Toliara mineral sands project.

This would give the merged entity a mix of existing cash flow, near-term development potential in the mineral sands business, exploration upside, as well as a strategic position in Madagascar, which was attracting significant international investment in its emerging resources industry, Malagasy said.

The Perth-based explorer said in a statement that its independent directors believed that the merger would represent a strategic benefit to both companies.

Malagasy would benefit from the acquisition of an advanced mineral sands project, while MRNL would benefit from its project being combined within a listed company, while both companies would benefit from their combined complementary technical, operation and commercial skills.

The advanced Toliara sands project has a Joint Ore Reserve Committee compliant resource of 710-million tons, grading at 6,3% total heavy minerals, containing about 30-million tons of ilmenite.

Malagasy believed that the combination of the Toliara project with its own existing Vohibory, Fotadrevo and Ampanihy projects, targeting copper, nickel, PGMs and vanadium, would enhance the company’s presence in Madagascar and its ability to achieve early development of its mineral assets.

The implementation of the merger scheme was subject to a number of conditions, including an independent expert analysis, a due diligence by both companies, shareholder approval by both companies, as well as regulatory and court approvals.

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