TORONTO (miningweekly.com) – Toronto-listed project developer Transition Metals and private Sudbury, Ontario-based firm HTX Minerals on Monday signed a definitive arrangement agreement to combine the businesses.

Under the agreement, the two companies would implement an all-script plan of arrangement, by which Transition would acquire all of HTX’s securities.

"This is an important step forward for both companies, including their shareholders, employees and partners. The combined entity will be a much larger project generator focused on the discovery of gold, platinum and base metal deposits in Canada,” Transition Metals and HTX Minerals CEO Scott McLean said on Monday.

McLean, an award-winning exploration geologist with more than 25 years of experience in all facets of exploration, recently told Mining Weekly Online the company will be better positioned for growth and success with its award-winning and highly experienced team of geologists, strategic exploration alliances with Implats and the Nunavut Resources Corporation, joint venture (JV) partnerships, and a portfolio of 30 projects in Ontario, Nunavut, Saskatchewan and British Columbia.

Transition Metals was spun out of HTX Minerals in 2010 to capitalise on the market for gold-focused resource companies, and went public in August 2011 to provide HTX shareholders with some liquidity. While the two companies operate independently, they each follow the project generator business model, and have common CEOs, CFOs and marketing executives.

The business combination would also provide the resultant group with a more experienced exploration and management team, which includes eight geologists, of which three are prize winners for their critical contributions in discovering new deposits.

The transaction, which was expected to close in the second quarter, would be considered a reverse takeover for the purposes of the TSX Venture Exchange (TSX-V) and the resulting issuer would be a Tier 2 mining issuer on the TSX-V.

Under terms of the agreement, the two companies would implement a plan of arrangement whereby all common shares of Transition would be consolidated on a 2:1 basis. HTX shareholders would receive shares of Transition at an exchange ratio of 0.8 post-consolidation Transition shares for each HTX share, and all shares of Transition held by HTX would be cancelled.

The unaudited combined cash position for Transition and HTX was $2.2-million, as at March 1.