StratMin Global Resources Plc said Feb. 2 that it executed heads of agreement to acquire Signature Gold Ltd. in a reverse takeover deal.
The company has 30 days to complete due diligence, after which a binding scheme implementation agreement will be executed.
StratMin will issue equity valuing up to £9.5 million as consideration to be allocated pro rata to the Signature shareholders in two tranches. Additionally, an option fee of US$250,000 is payable by StratMin on signing the heads of agreement.
Under the first tranche, the company will issue about £5.5 million worth of shares at a price of 2 pence apiece. A further £4.0 million of shares will be issued on completion of a JORC-compliant resource on Signature's lead project.
Upon the issue of tranche-one shares, existing StratMin shareholders will represent 39.15% and Signature shareholders 60.85% of StratMin.
Upon completion of the deal, Signature can nominate two directors to the board, with the total number of directors capped at five. Subject to approvals and due diligence, Signature nominated Bruce Fulton and Peter Prentice to be appointed.
The deal has unanimous support of the Signature board, which currently holds over 50% of the issued capital of the company.
Signature is a gold exploration company focused on large-scale intrusive related gold system assets in Queensland, Australia. The company also has an option to acquire the Kasperske Hory gold project in the Czech Republic.