The deal represents a 48 per cent premium above TriAusMin’s 30-day volume weighted average share price and values it at around $15.6 million.
Heron will also provide TriAusMin with a $1.3 million convertible loan for short-term working capital.
The convertible loan will have a term of nine months with an interest rate of 8 per cent.
The merged entity will have a market capitalisation of around $48.5 million.
Its focus will be on developing the Woodlawn underground base metal project in the Lachlan Fold Belt in NSW, which contains approximately 8.6 million tonnes of measured and indicated resources at an average grade of 10.3 per cent zinc, 4 per cent lead and 1.8 per cent copper.
Heron’s flagship asset is the Kalgoorlie Nickel Project, while it also holds an extensive exploration portfolio of gold, copper and base metals projects in Western Australia and NSW.
Heron chairman Craig Readhead said the merger was an ideal fit with the company’s current strategy.
“Heron has been evaluating Lachlan Ford Belt development and production assets for more than a year, and Woodlawn stands out for us as having excellent potential to deliver significant value to our shareholders,” Mr Readhead said in a statement.
“The Woodlawn underground project, which is very prospective but relatively early stage, will benefit from the application of Heron’s exploration and geological expertise, whilst the Woodlawn Tailings Retreatment project provides an advanced and lower risk platform from which to develop potential early cash flow or an attractive combined project.”
The merger has received support from TriAusmin’s board of directors as well as its major shareholders.
The merged company will also continue work on investigating technologies or processing options to improve the economics of the Kalgoorlie Nickel Project.
It will be based in West Perth, with Mr Readhead to assume the role of non-executive chairman, while TriAusMin’s current managing director Wayne Taylor will become chief executive and managing director.
Prior to both companies going into a trading halt on the ASX earlier today, Heron’s stock was at 14.5 cents, while TriAusMin shares were at 4.7 cents.