Mineral exploration and development company RTG Mining has signed a conditional scheme implementation deed (merger agreement) with Sierra Mining.
The deal will combine the two companies at an agreed exchange ratio, of three RTG shares for each Sierra share held and one RTG option for every three Sierra shares held.
The RTG options would be exercisable for a period of three years at an exercise price of $A0.15 (C$0.15).
This consideration represents about A$0.301 (C$0.301) per Sierra share, and a premium of 27.4% to the 30-day volume-weighted average price (VWAP) of the Sierra share price, based on the 30-day VWAP of the RTG share price; a premium of 15.9% to the closing price of Sierra shares of A$0.26 as at 21 February.
The combined entity would be led by a management team with the exploration, mine development and operating experience in the Philippines to progress Sierra’s Mabilo and Bunawan projects.
The merger would be implemented by way of scheme of arrangement between Sierra and its shareholders, under the Australian Corporations Act 2001.
The Mabilo project is a near-surface deposit and high-grade polymetallic development project, with a direct shipping opportunity in the early years of operation which would strongly mitigate the need for development capital.
RTG believes that the newly combined company will be well-positioned to further explore and develop the mineral potential of the area.
Sierra also owns the Bunawan project, which is a highly prospective high-grade gold exploration project located next to the existing high-grade Co-O mine, owned by Medusa Mining.
The transaction is conditional upon approvals from Sierra shareholders, RTG shareholders and the Australian Court, as well as necessary regulatory approvals and customary conditions.