Western Australian mining identity Tony Sage will chair the combined entity of Jackson Minerals and Scimitar Resources, which have unanimously agreed to merge.
In a statement today, both West Perth-based explorers have agreed to merge by way of scheme of arrangement, with Scimitar to make an offer to acquire all of the issued shares in Jackson through a scrip deal.
Details of the scrip arrangement will be released following an independent valuation.
However, Scimitar will issue a $2.2 million convertible note to cover the costs of the merger, repay Jackson's current convertible note of $750,000 and provide additional working capital.
Mr Sage, who is not on either companies' board, will take the role of non-executive chairman of the combined group, with Jackson and Scimitar to have equal board representation.
Earlier this week, Mr Sage bought a 6 per cent interest in Jackson Minerals for $150,000.
"We are proposing a merger to better position both companies, as a merged entity, to take advantage of the growing world-wide acceptance of the uranium solution to the global energy crisis," Jackson managing director Brett Smith said.
"We believe the proposed merger will create value for both Scimitar and Jackson shareholders, with the combined entity having a major global presence in the uranium exploration sector with substantial resource and near-mid term development prospects."
The combined entity will have assets a portfolio of uranium, gold and base metal assets in Australia and Argentina.
The merger is subject to due diligence by both companies.
The announcement is pasted below:
Australian uranium company Jackson Minerals Limited (ASX: JAK) ("Jackson" or "the Company") and fellow Australian resources company Scimitar Resources Limited (ASX: SIM) ("Scimitar") have entered into a conditional merger implementation agreement to merge the two companies by way of a Scheme of Arrangement (Scheme).
The Jackson and Scimitar boards have unanimously agreed to the terms of the merger implementation agreement, as they believe the merger represents an opportunity to create a new entity better positioned for growth than either company on a standalone basis.
The merger will combine two companies with highly complementary exploration profiles and provide a substantial Australian and South American exposure to the uranium industry. The merged group will have a large, diversified uranium, gold and base metal exploration portfolio throughout Australia and Argentina.
Experienced resources executive Mr Tony Sage will be appointed Non-Executive Chairman of the merged company, with both companies to have equal representation on the merged company's board.
As part of the terms of the Scheme, Scimitar will make offers to acquire all of the issued shares in Jackson in exchange for the issue of shares in Scimitar. Jackson has unlisted Options on issue which will be dealt with via individual agreements with Scimitar, conditional on completion of the Scheme.
The parties have appointed an independent valuer to value Jackson for the purpose of forming the basis of negotiation in determining the scheme consideration to be issued by Scimitar to the holders of shares in Jackson. Jackson will announce this valuation and the details of the scheme consideration upon its receipt.
As a result of this transaction Jackson's securities will remain in suspension from trading until implementation (or termination) of the Scheme.
"We are proposing a merger to better position both companies, as a merged entity, to take advantage of the growing world-wide acceptance of the uranium solution to the global energy crisis" said Jackson Minerals Managing Director Brett Smith.
"We believe the proposed merger will create value for both Scimitar and Jackson shareholders, with the combined entity having a major global presence in the uranium exploration sector with substantial resource and near-mid term development prospects.
"The two companies have complementary exploration portfolios, management ideals and shareholder bases, and bring together a highly experienced management team that will take the combined entity forward," Scimitar Resources Managing Director Terry Topping added.
"The merged company will be well positioned to play a key role in the growth of the uranium sector in the coming years."
Under the terms of the agreement Scimitar will issue a A$2.2m Convertible Note to cover the costs of the merger, repay Jackson's existing current Convertible Note of A$750,000 and to provide additional working capital.
Key steps to be undertaken as part of the merger include:
(a) lodgement of Scheme documents with the ASIC;
(b) obtaining Court approval to hold the Scheme meeting for Shareholders to vote on the Scheme;
(c) obtaining Jackson Shareholders approval for the Scheme; and
(d) if Jackson Shareholders approve the Scheme, Court ratification of the Scheme.
A transaction timetable, including details of the dates for the above steps and implementation of the Scheme, will be provided to shareholders in due course. The parties have agreed to share all of the costs of the merger and implementation of the Scheme.
Implementation of the Scheme is subject to conditions including:
(a) both parties being satisfied with the independent valuation for the purpose of determining the scheme consideration;
(b) satisfactory completion of due diligence by the Boards of both companies; (c) Jackson shareholder approval and court approvals in respect of the Scheme;
(d) all relevant regulatory approvals; and
(e) other conditions customary for a public transaction of this nature.