Anova Metals Ltd. is planning to acquire Exterra Resources Ltd. in an all-scrip transaction that will see Exterra shareholders receiving 1 Anova share for every 2 shares held, the two companies said June 8 in a joint news release.
Anova will issue approximately 171,094,353 to complete the takeover, valued at A$21.3 million. The merged entity will have a market value of around A$78 million.
The combined entity will control the preproduction-stage Second Fortune gold mine in Western Australia and the developmental-stage Big Springs gold project in Nevada, with total reserves of 339,000 tonnes at 6 g/t of gold for 65,000 ounces and resources of 17.2 million tonnes at 2.2 g/t of gold for 1.2 million ounces.
Exterra's board recommended to its shareholders to vote in favor of the merger at a general meeting in August or September. Shareholders holding 19.92% of the company have agreed to back the scheme.
Upon the approval, Exterra directors John Davis and Geoff Laing will be invited to join the Anova board, with Laing to be offered the role of executive director. They will join nonexecutive chairman Mal James, executive director Bill Fry and nonexecutive director Alasdair Cooke.
To ensure that Exterra is able to progress Second Fortune, Anova will lend the company A$2 million.
The merger is expected to be implemented by early September.