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Metminco agrees to binding terms for merger with Andes Resources

The merger is supported by Andes’ cornerstone shareholders Sandfire Resources (19.14%), Bullet Holding Corporation (16.2%), Andes’ directors, IFM investors and Treadstone Resource Partners.
Merger sign
Funds raised will be spent on the maiden drilling program at the Chuscal Gold Project

Metminco Limited (ASX:MNC) and Andes Resources Limited have agreed to binding terms for a merger, combining to form a Columbian gold exploer and developer with a dominant position in the Mid-Cauca gold belt.

The merger brings together Metminco’s advanced Miraflores Gold Project as well as Chuscal, Tesorito and other surrounding prospects with Andes’ extensive tenement holding to create a company with multiple advanced exploration assets.

Location of Andes’ exploration ground and Metminco’s ground

 

READ: Metminco in trading halt with capital raising and acquisition news pending

Metminco chief executive chairman Kevin Wilson said: “This transaction is transformational for both Metminco and Andes providing Metminco with further exposure to a large exploration portfolio in the Mid-Cauca gold belt of Columbia.

“The funds to be raised, together with the favourable restructure of our existing repayments to RMB ensures we can accelerate exploration activities on our merged projects.”

Andes’ managing director Jason Stirbinskis added: “With the execution of the BIA, the merger of these two highly complimentary portfolios is a step closer.

READ: Metminco enters final stage of exploration licence grant process for Chuscal Gold Project

“The combination of the two entities creates a company with enhanced scale and an advanced exploration and development portfolio with considerable exploration upside.

“We look forward to establishing Metminco as a leader in gold exploration in Columbia, chasing world-class gold deposits.”

The merger and financing will provide Metminco with:

  • One of the largest portfolios of gold-copper exploration assets in one of the world’s most richly endowed gold belts;

  • Funds to conduct a maiden drilling program at Chuscal;

  • Enhanced ability to advance the Quinchia Gold Project towards a development decision;

  • An impressive and experienced shareholder base supporting Andes Resources; and

  • Favourable restricting of the RMB Australia Holdings debt to a combination of equity and deferred residual debt repayments on project milestones.

READ: Metminco raising $1 million ahead of proposed merger with Andes Resources

In support of the proposed merger, Metminco has completed a strongly supported placement of convertible notes to raise $918,000 while Andes is in the process of completing its own working capital placement.

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