Junior iron ore explorers and joint venture participants Padbury Mining and Aurium Resources have entered formal merger negotiations.
The two companies signed an agreement late yesterday afternoon setting out a 60-day exclusivity and due diligence period.
Terms of the merger have not yet been agreed, and would be subject to shareholder approval.
A merger of the two Mid West-focused companies would create an explorer with a combined market capitalisation of around $41 million.
The companies are already developing the Peak Hill iron project in a joint venture arrangement.
Drilling to date has identified a maiden inferred JORC compliant resource of 850 million tonnes at 27.3 per cent Fe and a hematite exploration target of between 10Mt and 55 Mt at 55-58 per cent Fe.
Both companies’ shares have been steady this morning, with Padbury trading at 1.4 cents and Aurium 2.7 cents.
