PERTH (miningweekly.com) – Junior Exterra Resources has announced a merger implementation agreement with fellow ASX-listed Anova Metals.
Under the terms of the agreement, Anova has agreed to acquire all the issued capital of Exterra, with Exterra shareholders to receive one Anova share for every two Exterra shares held.
Based on a closing price of 12.5c for each Anova share, the offer is valued at A$21.3-million, with the merged entity anticipated to have a market capitalisation of A$78-million.
The scheme will result in Anova shareholders holding a 73% interest in the combined company, while Exterra shareholders will hold the remaining 27% interest.
“This is a compelling transaction for both Exterra and Anova that will combine near-term cashf lows with exploration upside,” said Exterra executive director Geoff Laing.
The offer represented a 64% premium to the closing price of Exterra shares on June 5, and a 61% premium to the five-day volume-weighted average share price.
The two companies said in a combined statement that in merging, shareholders of Anova and Exterra will have exposure to Exterra’s production and exploration projects, while benefitting from the growth potential of Anova’s near-term production asset and exploration projects, including the Big Springs gold project in Nevada.
“We look forward to working with the Anova team to advance Big Springs to production and particularly to applying sorting technology where it provides a competitive advantage,” said Laing.
Anova executive director Bill Fry said that the transaction would create a diversified company with a portfolio of projects in two mining jurisdictions.
“We look forward to working with the team at Exterra as they bring their Second Fortune project into production, using the strong balance sheet of Anova. The Exterra project portfolio has close similarities with Anova in terms of imminent production and outstanding exploration potential.”
Both the Anova and Exterra boards have recommended that shareholders support the merger, with a general meeting of Exterra shareholders to be called in late August or early September.
Exterra recently published a feasibility study for its Second Fortune mine, in Western Australia, which found that the project could deliver 73 000 oz over an initial two-year mine life. The study considered the development of a mine below the existing openpit operation, generating a sorted concentrate for toll treatment. First gold production has been targeted for the third quarter of this year, with ore to be sourced from dumps, while underground ore would be delivered in the fourth quarter.