PERTH (miningweekly.com) – ASX-listed Aeris Resources has struck a A$234-million deal with fellow listed Washington H. Soul Pattinson (WHSP) to acquire Round Oak Minerals as part of its diversification strategy.

Round Oak owns a diverse portfolio of Australian copper and zinc assets, including the Jaguar zinc/copper underground mine, in Western Australia, the Mt Colin copper underground mine and the Barbara deposit, in Queensland, the Stockman copper/zinc development project in Victoria, and exploration tenements it the Mt Isa region of Queensland.

Under the terms of the agreement, Aeris will pay WHSP A$80-million in cash on the closing of the transaction, and will issue more than 1.46-billion of its own shares, at a price of 10.5c each, or A$154-million.

The transaction would result in WHSP becoming Aeris’ largest shareholder at 30%, and would see WHSP chairperson Robert Millner join the Aeris board as a nonexecutive director.

“This transaction transforms Aeris into a midtier copper, gold and base metals producer with multiple operations and exceptional growth potential. The Round Oak asset portfolio is an excellent fit with Aeris’ stated strategy to acquire advanced copper, base metals and gold assets in Australia that are strongly cash flow generative with attractive exploration upside,” said Aeris executive chairperson Andre Labuschagne.

“The introduction of the Stockman project provides us with a second long-life project, alongside Tritton, to underpin the group’s production into the next decade.

“We are confident that through the current team at Aeris and the experienced, high-quality operational team joining us from Round Oak we will add significant value to these assets and continue to grow the company to the benefit of shareholders.”

Aeris on Thursday said that it intends to fund the cash component of the transaction through a fully underwritten A$117-million equity raising conducted via an institutional placement and a 1-for-4.22 pro-rata, accelerated non-renounceable entitlement offer.

The company will raise an initial A$61-million through a share placement to institutional investors, priced at 10.5c each, representing a 12.5% discount to Aeris’ last closing price.

The placement of 162.8-million of these shares, raising a total of A$17.1-million, is subject to shareholder approval, with the remainder of the shares being placed under Aeris’ existing placement capacity.

A further A$56.1-million will be raised through the entitlement offer, of which A$22.5-million will be raised in the retail component of the entitlement offer, with the institutional component to raise the balance.

Aeris expects to place 1.1-billion shares under the equity raising.