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Juniors Perpetual and Neo to merge

26th April 2013

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – ASX-listed juniors Perpetual Resources and Neo Resources on Friday announced a merger, which would see Perpetual acquire all of the issued share capital in Neo in exchange for some 14.1-million of its own shares.

Under the terms of the scheme implementation agreement, Neo shareholders would receive one Perpetual share for every four Neo shares held, representing a value of A$0.053 a share.

In addition, Perpetual would issue 3.15-million fully paid ordinary shares to Regional Management as consideration for the novation of convertible notes held by Regional Management in Neo, to Perpetual.

Perpetual would further advance Neo some A$350 000 to continue work on its Wiagdon Thrust gold project, in New South Wales, as a loan. The advance would be secured against Neo’s assets.

Perpetual said the proposed transaction would benefit both companies, as Perpetual had the financial capacity to fund both companies’ assets from existing reserves, without the need to raise more equity.

Perpetual’s shareholders would also benefit from a diversification of interest, access to large land-holding in Australia, an expanded shareholder base and input from an experienced management team.

The merger would be subject to shareholder and regulatory approval, as well as the agreement of Regional Management to novate the convertible notes, Neo’s option holders agreeing to cancel the options and Perpetual issuing the advance.

Perpetual’s primary focus is on exploring and developing its Atoz coal project, in West Sumatra. The project covers 192 ha, and has an approved production licence.

Neo has a 70% interest in the Wiagdon Thrust joint venture, which comprises a suite of 11 contiguous exploration licences over some 2 000 km2 in New South Wales.

Edited by Chanel de Bruyn
Creamer Media Online Managing Editor

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