21/05/2009 - 13:06

Scimitar, Jackson merger seeks $7.5m

21/05/2009 - 13:06

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The new company to emerge from a merger between Jackson Minerals and Scimitar Resources will seek $7.5 million in fresh capital to ramp up exploration activities at its uranium assets.

The new company to emerge from a merger between Jackson Minerals and Scimitar Resources will seek $7.5 million in fresh capital to ramp up exploration activities at its uranium assets.

Earlier this week, Jackson shareholders overwhelmingly voted in favour of the merger, with the combined entity to be called Cauldron Energy.

The merger still needs Federal Court approval for the scheme of arrangement.

Scimitar today said it has appointed Greenday Corporate as the corporate adviser to the $7.5 million raising, which will take place through a convertible note issue.

Each note has a value of 50 cents each and a three-year term, maturing on July 31 2011.

The notes have an interest rate of 10 per cent per annum, paid quarterly in arrears.

"The structure of the Notes also ensures that dilution of existing shareholders is minimal, with the notes unable to be converted below $0.425, yet able to be significantly higher depending on the prevailing share price of the company at the time of conversion," Scimitar managing director Terry Topping said.

"Upon finalising this funding we believe the key reason for our merger, to achieve increased capital markets support, will immediately be achieved."

He added that funds raised will be used to redeem the existing $2.3 million convertible notes on issue and exploration.

The note issue will proceed once court approval is received.

Tony Sage has already been appointed chairman of Cauldron, which will have assets in Australia and Argentina.

 

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