If both transactions are implemented, Gindalbie shareholders will receive 2.6 cents for each Gindalbie share, representing a 90% premium to Gindalbie’s 30-day volume weighted average price.
Gindalbie shareholders will also receive a pro-rata distribution of Coda shares at a ratio to be confirmed.
Coda will hold Gindalbie’s Mt Gunson assets as well as $10.64 million in cash less any incurred expenditure at Mt Gunson.
Culmination of productive discussions
Gindalbie non-executive chairman and non-executive chairman-designate of Coda Keith Jones said: “I am delighted to present the acquisition and merger proposals to our shareholders, which are the culmination of productive discussions and which I believe deliver a deal that is mutually beneficial for all parties.
“The acquisition and demerger allow Gindalbie shareholders to receive a cash price significantly higher than the current market price for their Gindalbie shares.
“[They will also] emerge with an ownership stake in an exciting new company that is focused on the Mt Gunson Copper-Cobalt Project.
“Coda intends to apply for listing on the ASX, with listing subject to all necessary regulatory approvals, and carry out fundraising in the short-to-medium term to strengthen its balance sheet.”
Unanimous board recommendation
Gindalbie’s directors intend to vote their relevant interests in favour of the resolutions and have unanimously recommended shareholders also vote in favour of each transaction.
The board believes the demerger will enable Gindalbie shareholders to retain exposure to Mt Gunson’s exploration and development without the legacy issues of Gindalbie.
Coda’s leadership team is to include Keith Jones and Gindalbie chief executive officer Chris Stevens, who is managing director-designate of Coda.
Gindalbie’s independent non-executive directors Paul Hallam and Robin Marshall are also proposed to join the Coda board and Ansteel also intends to nominate a director.
Strategic asset portfolio in SA
Coda currently holds the rights and interests under the Mt Gunson farm-in agreement to a substantial and strategic portfolio of tenements in South Australia.
Gindalbie announced its entry into the Mt Gunson farm-in agreement on March 12, 2007, and the agreement was renewed to Coda on May 21, 2018.
The farm-in tenements include the highly-prospective Mt Gunson project which is 100 kilometres south of BHP Billiton Ltd’s (LON:BHP) Olympic Dam Copper-Gold-Uranium Mine and within 50 kilometres of OZ Minerals Ltd’s (ASX:OZL) Carrapateena Copper Project.