Develop Global has signed a scheme implementation deed (SID) with Australian mining exploration company Essential Metals to acquire the latter for approximately A$152.6m ($101.31m).

Under the SID, Essential Metals shareholders will receive one new Develop Global share for every 6.18 Essential Metals shares held. This implies a price of around A$0.56 per share.

Upon the implementation of the scheme, Essential Metals shareholders will own 18.4% of the combined entity.

The combined group is estimated to have A$771.3m in pro forma market capitalisation.

Essential Metals’ largest shareholder, MinRes, has agreed to vote in favour of the SID, in the absence of a superior offer.

Furthermore, Essential Metals’ board of directors unanimously recommended that the scheme is in the best interests of its shareholders.

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With the transaction, the acquired company is expected to gain exposure to Develop Global’s Woodlawn and Sulphur Springs energy transition metals assets, along with its mining services division.

Essential has been seeking potential partners to fund its Pioneer Dome lithium project in south-west Western Australia, reported Reuters.

Pioneer Dome is a hard rock lithium development project 130km south of Kalgoorlie in Western Australia’s Lithium Corridor.

Develop Global managing director Bill Beament said: “This agreement delivers Essential shareholders a highly attractive premium of 34.9% to the closing price of Essential shares on 30 June 2023, as well as a host of other significant benefits.

“They will retain ongoing exposure to the upside at the Pioneer Dome Lithium Project. They also stand to benefit enormously from Develop’s ability to unlock the value of Pioneer Dome in a timely and efficient manner by capitalising on Develop’s outstanding operational/mine-building team and extensive funding capability.”

Essential Metals managing director Tim Spencer said: “In addition to delivering a significant premium, the scheme, if approved and implemented, will allow Essential shareholders to retain ongoing exposure to the development of our flagship lithium asset at Pioneer Dome as part of a much larger diversified resources group.”