Bradford talks up merger

An expanded Independence Group would hope to eventually enter the ASX100, chief executive Peter Bradford told a Western Australian Mining Club lunch yesterday.

In the medium term, the company expects to sit at the top of the ASX200 following completion of its planned merger with Sirius Resources, he said.

Mr Bradford touted the attractiveness of the enlarged miner to big institutional investors.

“The combined entity becomes one of the most liquid mid cap resources companies, even allowing for the Mark Creasy holding,” he said.

“This has the potential to open up the register for a number of very large global funds.”

The merger, which was announced earlier this week, would give the new group four major assets within a 350 kilometre radius of Kalgoorlie, with Nova-Bollinger (nickel) and Tropicana (gold) the two flagship projects.

Despite Independence coming under some criticism for paying about 46 per cent above Sirius’s one month volume weighted price, Mr Bradford said the deal would fit well within the miner’s strategy.

“We believe this is a transformational combination for the company and for our sector.

“It makes strong strategic sense and it brings together high quality assets in a mining friendly jurisdiction.”

One key driver of the deal was that Nova-Bollinger was a high margin asset, giving the company some flexibility if commodity prices turn, while another was the long mine life of the project.

He said the company was not looking for a telephone book of projects, but rather a handful of good quality projects, so as not to be hit by excessive scale.

At $4.77 per share, Independence was down more than 18 per cent on its close Friday last week, while Sirius was up by a similar amount in that period, to $3.84.