US Nickel makes all-scrip bid for Argent

US Nickel has announced its intention to make an off-market all-scrip takeover for Argent Minerals, the owner of the historic Bullant gold mine near Kalgoorlie.

US Nickel currently has a 27.4 per cent stake in Argent.

The Subiaco-based company announced it plans to offer Argent shareholders four US Nickel shares for every three shares in Argent valuing Argent's shares at 21.3 cents each.

US Nickel will also offer Argent a loan of $4 million to help fund works at the Bullant mine.

It plans on buying the outstanding Argent options on a 1-for-5 basis.

In a statement to the Australian Securities Exchange, Argent said that the company's board is considering the terms of the takeover offers and intends to engage an independent expert to prepare a report on whether the takeover offers are fair and reasonable.

In early October, West Leederville-based Argent completed acquisition of the Bullant mine.

Argent hopes to re-open the mine, extend the decline and establish development drives to support the commencement of stoping within six months.

See statement from Argent below:

The Company received today an announcement from US Nickel Limited (ABN 44 091 009 565) (ASX:USN) that it intends to make an off-market takeover offer for all the fully paid ordinary shares in the Company that it does not already own for a consideration of 4 US Nickel shares for every 3 shares in the Company and an offer for all of the options for a consideration of 1 US Nickel share for every 5 options held.

US Nickel is now required to provide a Bidder's Statement and written offers to shareholders and optionholders within 2 months.

The Board is considering the terms of the takeover offers and intends to engage an independent expert to prepare a report on whether the takeover offers are fair and reasonable.

At this stage, shareholders and optionholders are advised to take no action with respect to the takeover offers. As mentioned, shareholders and optionholders will be receiving written offers from US Nickel that include a Bidder's Statement. The Company will also be providing to shareholders and optionholders a Target's Statement, which will include the independent expert's report, in due course.

See statement from US Nickel below:

US Nickel Limited (ABN 44 091 009 559) (US Nickel) intends to make an off-market takeover offer for all of the fully paid ordinary shares in Argent Minerals Limited (ABN 89 124 780 726) (Argent) which it does not already own.

Consideration for the share offer will be four (4) US Nickel shares for every three (3) shares in Argent (Share Offer). The Share Offer is subject to conditions which are set out in the Schedule to this Announcement. US Nickel currently has a relevant interest in 27.4% of Argent.

US Nickel is also offering to acquire Argent's 20 cent 30 June 2011 options (June 2011 Options) on the basis of one (1) US Nickel share for every five (5) June 2011 Options (Option Offer).

Based on the closing price of US Nickel shares as at 17 November 2010, the Share Offer values an Argent share at 21.3 cents each.

This represents a premium of:
- 6.7% to Argent's closing price on 17 November 2010;
- 8.7% to the five (5) day VWAP of Argent shares prior to the date of this Announcement; and
- 11.9% to the one (1) month VWAP of Argent shares prior the date of this Announcement.

Transaction Synergies
If the Share Offer and Option Offer (together the Offer) are successful, the transaction will provide:
operational and corporate synergies for the proposed re-commencement of operations at the Bullant Gold Project (located in Kalgoorlie, Western Australia);
project diversification and exposure to US Nickel's North American projects;
access to a motivated board and management team focussed on project advancement and identification of new opportunities;
reduced corporate overheads; and
increased liquidity and access to capital necessary for the ongoing development at the Bullant Gold Project.

Working Capital
US Nickel also intends to offer Argent an unsecured loan advance of $4 million to assist with ongoing development at the Bullant Gold Project (Advance). It is proposed that the Advance will not be repayable within the first twelve (12) months of drawdown and otherwise will be made on commercial terms.

US Nickel intends to raise additional working capital pursuant to its existing placement capacity to meet these obligations.

Timing
US Nickel is in the process of preparing a formal bidder's statement in relation to the Offer and intends to lodge that document as soon as practicable.