Gunson buys Strandline for $2.5m

Perth minerals explorer Gunson Resources has agreed to acquire a 100 per cent interest in mineral sands firm Strandline Resources for $2.5 million, and will assume the name of its target as it expands its focus in offshore assets.

The acquisition would give Gunson direct access to Strandline’s assets, including ownership of 16 mineral sands exploration tenements covering over 2,000 square kilometres in Tanzania, along with two exploration applications covering a further 160 square kilometres in the same area.

“It supplements our construction-ready Coburn mineral sands project in Western Australia with large scale, highly prospective mineral sands exploration assets in an underexplored area of an established producing province,” Gunson managing director Bill Bloking said.

“It has the potential to deliver a company maker asset, provides a strong board and management team with an excellent mineral sands pedigree, and sets a platform for funding and ongoing market support.”

Gunson said it would seek employment arrangements with Strandline’s management team and appoint Strandline board members to the company.

Under the terms of the deal, Gunson will issue 166.7 million shares to Strandline’s 16 shareholders at an issue price of 1.5 cents per share.

In order to fund the acquisition, Gunson said it would undertake a capital raising by issuing up to 146.6 million shares at an issue price of 1.5 cents per share, to raise $2.2 million.

In addition to the placement, Gunson will offer eligible shareholders the right to participate in a share purchase plan to raise further funds of up to $1 million.

Gunson also announced that former Iluka Resources managing director Mike Folwell would be appointed as chairman of the company’s board.

Meanwhile, Mr Bloking will remain on the board as a non-executive director but will step down as managing director, leaving the role to be filled by Genesis Minerals chairman Richard Hill.

Gunson shares last traded at 2.4 cents per share at 9:50am.