MacPhersons Resources Limited (ASX: MRP) and Intermin Resources Ltd (ASX: IRC), both are mining companies based out in Western Australia engaged in gold, silver and zinc exploration projects within the Kalgoorlie region and the Menzies region. Currently, IRC possesses an estimated 562,000 ounces of gold reserve while MRP’s Boorara gold project, located 10 km east of Kalgoorlie-Boulder, have 507,000 ounces of gold, and the Nimbus project have 78,000 ounces of gold, 20Moz of silver and 104,000t of zinc.
MRP and IRC have agreed to execute a merger agreement through a scheme of arrangement with a new name, Horizon Minerals Limited (subject to IRC shareholders’ approval). With the combined mineral resources of around 1.15Moz gold, it will lead to the formation of a monopoly gold producer in the Kalgoorlie region. The combined entity will have access to extract minerals over an area of 1,100 km square.
The Board of MRP unanimously recommends the merger with the best interest of the shareholders. IRC’s Managing Director Jon Price will lead the merged entity supported by a strong Board comprising of IRC’s Chairman Peter Bilbe and MRP’s Directors Ashok Parekh and Jeff Williams.
The merger will take place through an approved scheme of arrangement by the court and MRP’s shareholders. The scheme of arrangement states that each MRP shareholder will be entitled to 1 share of IRC for every 1.8227 shares of MRP. The merger accounts for a transaction value of $0.0825 per MRP share (based on IRC’s 30-day VWAP). The ratio of holding will be 55% owned by IRC and the remaining 45% by MRP. The tentative record date and implementation date is set to be in Early June 2019.
Jett Capital Advisors LLC is the corporate advisor, and Mills Oakley is acting as a legal advisor to the merger with Baker McKenzie acting as a legal advisor to MRP.
The combined asset base will possess an extensive portfolio of assets with high growth prospects in the WA goldfields. As indicated above, the combined entity will hold 562,000 ounces of existing estimated gold mineral resource close to the 507,000 ounces Boorara deposit; wherein Boorara gold project can provide baseload for a standalone plant in the Boorara area. Further, a pipeline of development projects has been identified, including the Goongarrie Lady open pit and the recently acquired Yarmany and Lakewood project areas which will be a focus for resource definition and new discovery drilling in 2019.
The combined entity, further, intends to start a study for the integrated development of the existing gold projects to become an emerging mid-tier gold production business.
The securities of both, IRC and MRP, were placed in a trading halt on 7 December 2018 and later announced about the merger scheme. MRP’s scrip price last traded at 8.2 cents with no change today whereas the IRC’s scrip price last traded at 15 cents with a 3.5% increase over the previous close of 14.5 cents. IRC has not been performing well from the past six months and is down by 12% while there is no change in the MRP’s scrip price.
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