Foreign miners merge to beef up Zambales nickel venture
UNITED KINGDOM-based European Nickel PLC has merged with Australian firm Rusina Mining NL to create a “financially stronger company” that will finance the Acoje nickel mining project in Sta. Cruz, Zambales.
Rusina said on its Web site it had signed a Merger Implementation Agreement with European Nickel that would allow the British company to acquire the entire issued capital of Rusina. European Nickel currently owns 2.9% of Rusina.
Under the agreement, Rusina Mining shareholders will be offered four European Nickel shares for every five Rusina Mining ordinary shares held. The European Nickel shares represent a 15.5% premium to the Rusina Mining shares held by the stockholders, based on the latter’s 10-day weighted average share price of A$0.0933 per share.
“The merger is considered by [both companies] to be a logical outcome of the joint venture between European Nickel and Rusina at the Acoje nickel project in the Philippines and consolidates the ownership structure of the project ahead of critical development and financing decisions,” Rusina Mining said.
“The merger will create a larger, stronger company that will be better able to finance its development projects and grow into a mid-tier nickel producer,” it added.
The Acoje project in Sta. Cruz, Zambales is a three-way partnership among European Nickel, Rusina Mining and Consunji-led DMCI Mining Corp. Rusina holds a 72% interest in the project.
The merger comes a year before a feasibility study on the Acoje project falls due. Acoje is European Nickel’s next heap leach project up for commercialization, after the Caldag project in Turkey.
“This transaction delivers considerable value to Rusina shareholders as they can now be part of a larger, geographically diversified nickel company with a project at construction stage in Turkey and a pipeline of development projects in the Philippines and Albania,” Rusina Mining Managing Director Robert Gregory said in a statement.
Upon completion of the deal, Rusina Mining shareholders will own approximately 27.3% of the merged company.
The merger will likewise create a “significant nickel development company” with a resource base of 1.35 million tons of contained nickel and a medium-term nickel production target of 50,000 tons per annum.
The merger will be beneficial to European Nickel because this will further cement its presence in the country.
Aside from Turkey, the UK-based firm also has a big presence in Albania.
The merged firm will have a combined market capitalization of £62.5 million.
European Nickel said it plans to raise $19.4 million in fresh funds by selling additiona