PERTH (miningweekly.com) – Independent advisory BDO has deemed the merger between ASX-listed companies Echo Resources and Metaliko Resources to be fair and reasonable.
The junior companies in September announced a merger under which Echo would acquire all the issued shares of Metaliko by way of an off-market takeover offer, offering Metaliko shareholders one of its own shares for every two-and-a-half shares held.
Based on Echo’s closing price of 22c a share on September 27, the offer valued Metaliko at about A$38.9-million, or its shares at 8.8c each.
“The takeover bid provides an opportunity to combine two complementary asset portfolios, creating a company of increased scale, with early production potential and a landholding that has the potential to create a sustainable producing gold miner,” the independent expert’s report reads.
In its report, BDO noted that the pathway to production for Echo’s Julius gold project could be significantly accelerated by using Metaliko’s Bronzewing processing facility, with potential for gold to be produced as soon as mid-2017.
In addition, the merged entity will have access to an increased landholding of around 1 600 km2 in the Yandal greenstone belt, in Western Australia, providing for substantial exploration and resource conversion potential.
A shareholder meeting to approve the transaction will be held on November 11.
Edited by: Creamer Media Reporter
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