Titan to buy Andina

Peru-focused Titan Minerals has announced plans to acquire West Perth-based Andina Resources, which owns a number of assets in close proximity to Titan, in a scrip deal worth approximately $19 million.

Under the agreement, Andina shareholders will receive one Titan share for every 1.18 Andina shares held, leaving them with a 25 per cent stake in the company, or 561 million Titan shares.

Using today’s share price of 3.4 cents, the 561 million shares issued to Andina values the deal at about $19 million.

Andina owns two gold plants in Peru, which Titan says it can use to process ore from its Torrecillas project.

“Titan will be able to take advantage of the Vista gold plant to avoid building its own mill facilities, saving circa $US4 million in capital expenditure, and avoiding the three to four years required to achieve the gold plant licensing approvals,” the company said in a statement to the ASX.

“Ore can be transported from the Torrecillas gold project to the Vista gold plant via the Pan American Highway, which provides an efficient transport route from mine to mill.

“Any discovery and subsequent mining operations at the San Santiago concessions can also transport ore to the Vista Gold Plant for processing, which is located less than 100 kilometres away.”

Titan non-executive director Nicholas Rowley said the merger would reduce the company’s costs.

“The cost of toll treatment of ore in Peru is recognised as a significant cost to all miners,” he said

“By consolidating the Torrecillas gold project, Torrecillas gold mine, Tulin gold plant and the Vista plant into one entity, Titan will be uniquely positioned to mill its own ore and retain the ability to process small batches of high-grade ore for artisanal miners.”

Matthew Carr is a director of both companies.

The bid is subject to a number of conditions including shareholder approval and an independent expert’s acceptance.

Andina’s independent directors have recommended that shareholders accept the offer.

Shares in Titan were off 2.8 per cent at 3.4 cents each at 330pm AEDT.