PERTH (miningweekly.com) – Junior gold explorer Metalicity on Tuesday flagged its intention to make an off-market all scrip takeover bid for all of the fully paid ordinary shares in its joint venture (JV) partner in the Kookynie and Yundamindra gold projects, Nex Metals Exploration.
Metalicity’s offer to Nex Metals shareholders is 4.81 Metalicity ordinary shares for every Nex Metals share on issue, valuing Nex Metals equity at A$12.8-million based on Metalicity’s closing share price on September 13.
Under Metalicity’s offer, Nex Metals shareholders would own 37.5% of the enlarged entity that would hold a 100% interest in the Kookynie and Yundamindra gold projects, with improved access to capital, and an enhanced balance sheet position.
Metalicity has earned a 51% controlling interest in the Kookynie and Yundamindra gold projects after successfully completing a A$5-million exploration programme, and the projects are now under the direct operational control of Metalicity.
The company said on Tuesday that it believed the acquisition of Nex Metals and the opportunity to combine both companies would optimise the exploration and development potential of the projects by bringing the ownership under one listed entity.
“The combination of Metalicity and Nex Metals makes logical sense. The primary asset of both companies is the highly attractive Kookynie and Yundamindra gold projects. Rationalising the ownership of the projects into a single listed entity creates a number of compelling benefits for both groups of shareholders, and allows us to better realise and maximise the value of the projects for all shareholders,” said Metalicity chairperson Andrew Daley.
“We envisage the combined entity would be able to accelerate the development of the projects through better access to capital, reduced costs and greater efficiencies from removing the current JV structure.
“Metalicity has been in dialogue for over 12 months with Nex Metals regarding a combination of the two companies. We have presented a compelling proposal to the board of Nex Metals on multiple occasions and believe this offer should be placed in front of their shareholders. We continue to have a close working relationship with Nex Metals via the JV and we look forward to the fast and amicable completion of this transaction for the benefit of all shareholders.
“We expect Nex Metals shareholders want to retain exposure to the potential upside of Kookynie and Yundamindra so have structured the offer on a scrip basis with an attractive premium to the most recent closing price.”
The offer is subject to a number of conditions, including a 90% minimum acceptance.