In a deal reportedly worth A$8.8 million ($6.9 million), Brumby will acquire Marindi for 250 million of its own shares, as well as 25 million options.
In conjunction with the transaction, Brumby intends to undertake a A$3.75 million capital raising – comprising a A$1.25 million share placement and a A$2.5 million entitlement issue – to pursue an exploration and development programme at Marindi’s flagship Newman Base Metal Project in Western Australia.
Newman, located in the Pilbara region of Western Australia, includes the lead-zinc-gold Prairie Deposit and the lead-zinc-silver Wolf Prospect.
Marindi has the option to earn-in 100% of the Newman project. On Wednesday 27 May it made a A$500,000 payment to Prairie Mining as part of the acquisition of Newman, which will be concluded by the issue of A$1 million in cash or shares by September next year.
“We are delighted to have secured the opportunity to merge with Marindi through a transaction which will immediately reposition Brumby at the forefront of the Australian zinc industry,” Geoff Jones, Brumby’s chairman, said.
Following the merger, Marindi executives Ross Ashton and Joe Treacy will join Brumby’s board as chairperson-elect and md, respectively, while Jones and current mining executive John Hutton will remain on the board as non-executive directors.
Brumby’s shares were trading at $0.016 on the ASX at the exchange’s close on Wednesday.