02/06/2009 - 12:39

ABM Resources jumps on Archibald deal

02/06/2009 - 12:39

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Shares in Nedlands-based explorer ABM Resources have jumped after the finalisation of a deal with the Nick Archibald-led Ochre Holdings, which potentially could take control of the company.

ABM Resources jumps on Archibald deal

Shares in Nedlands-based explorer ABM Resources have jumped after the finalisation of a deal with the Nick Archibald-led Ochre Holdings, which potentially could take control of the company.

ABM today announced that due diligence was successfully completed on agreements with Ochre, a project finance and advisory group, announced last week.

Under the three-year binding contracts, Ochre has agreed to acquire at least one acceptable project and related funding for ABM within the next 90 days.

Additionally, an experienced executive team will be implemented within ABM, at the company's discretion, which will be led by Dr Archibald, who helped established Geoinformatics Exploration.

The agreement is subject to regulatory and shareholder approvals.

In return, ABM has agreed to issue 50 million shares, escrowed for 12 months, to Ochre on the proviso that the share price trade at or above two cents over 20 consecutive trading days.

ABM will also issue Ochre 515 million options on a staggered basis depending on the performance of ABM's share price.

ABM said if all the options were exercised while the current issue capital was in place, Ochre could emerge with a 42.9 per cent stake.

"The parties acknowledge that, based on ABM's current capital structure, completion of this transaction has the capacity of transferring control of ABM to Ochre," ABM previously said.

"This will occur if Ochre exercises all the options, which will inject up to $7,650,000 in new equity funds to ABM."

ABM added that it does not plan to raise capital until after the acquisition of projects by Ochre.

As a result of the strategic deal with Ochre, ABM will rationalise its non-core African assets.

Shares in ABM jumped 0.4 cents or 22 per cent to a high of 2.2c before easing to two cents at 14:15 AEST.

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