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Australia's Plukka buying Chilean gold explorer Tesoro

Australian jeweler Plukka Ltd. has agreed to acquire Tesoro Resources Ltd., and is planning to rebrand itself into the Chilean gold explorer's name post-transaction.

Privately held Tesoro buys, develops and builds mining projects in the Coastal Cordillera region of Chile. The company has options to acquire two gold projects, the El Zorro and Espina Gold projects, in that region.

Under the terms of Plukka's deal with Tesoro, Plukka will acquire 100% of Tesoro by issuing 168,441,238 fully paid ordinary shares. Plukka will also issue 25,236,900 shares to certain Tesoro creditors and directors for conversion of debts and director loans.

Additionally, Tesoro will be issued 205 million performance rights, convertible into Plukka shares, on a one-for-one basis. A consolidation of capital on a 2.5:1 basis is expected to be conducted before the completion of the transaction.

Upon closing of the deal, Plukka said it intends to change its business model "to further explore and develop its identified mineral deposits." It also plans to systematically explore and develop the El Zorro and Espina projects.

John Toll will remain as a nonexecutive director of Tesoro when the deal closes, while Cameron Williams and Peter Ruse will resign from the board. Plukka will appoint Zeffron Reeves and Geoffrey McNamara as new directors.

McNamara will also become the company's nonexecutive chairman, while Reeves will serve as its managing director, along with a new management team that will be appointed upon completion of the transaction.

The deal is subject to shareholder approval at a general meeting in October.