PERTH (miningweekly.com) – Juniors Coda Minerals and Torrens Mining on Wednesday announced a merger agreement to create a leading South Australia-focused base and precious metals exploration company.

Coda will make an off-market takeover offer for Torrens, offering 0.23 of its own shares for every Torrens share held. The offer values Torrens shares at 20.2c each, representing a 30% premium to the company’s last closing price, and to its ten-day volume weighted average share price.

The Torrens board of directors has unanimously recommended that shareholders accept the offer, in the absence of a superior proposal.

“The combination with Torrens provides a compelling opportunity to create value for both sets of shareholders by unlocking important synergies in the exploration and development of our core asset, the Elizabeth Creek copper project in South Australia. The offer provides an immediate premium of over 30%, while the consolidation of 100% ownership of Elizabeth Creek in a single company represents a logical and very positive next step in the project’s evolution,” said Coda CEO Chris Stevens.

“We look forward to welcoming Torrens shareholders to Coda’s register and for them to continue to benefit from further progress at Elizabeth Creek as we continue to progress the project through the next exciting phase of exploration and development in 2022.”

Post the offer being fully implemented, Coda is expected to have an implied market capitalisation of approximately A$109-million and the nature of the all-scrip consideration of the offer preserves Coda’s strong balance sheet which has current cash of A$14-million.

“Torrens acquired the Elizabeth Creek project in 2015, brought Coda into the project in 2017 via a farm-in-joint venture. Now in 2022, we are pleased that in addition to realising an attractive premium, the transaction provides Torrens’ shareholders with the opportunity to become shareholders of a company with significantly increased scale and a clear focus on the Elizabeth Creek copper project,” said Torrens MD Steve Shedden.

“By accepting the offer, Torrens’ shareholders will continue to have a material interest in the upside associated with Elizabeth Creek, while at the same time mitigating funding risks and gaining exposure to a more diversified exploration portfolio. Torrens' shareholders will retain exposure to the company’s existing gold assets in Victoria and New South Wales and its tenement applications in Papua New Guinea, while benefiting from Coda’s strong balance sheet and also gaining exposure to its recently acquired Cameron River copper/gold project in the Mt Isa district of North Queensland.

“Torrens’ board believes that this transaction is in the best interests of Torrens and unanimously recommends it to our shareholders, in the absence of a superior proposal,” he added.

The takeover offer is subject to a 90% minimum acceptance condition, as well as other customary conditions.

Meanwhile, Coda and Torrens have entered into a loan facility agreement pursuant to which Coda has agreed to provide Torrens with up to A$2-million to assist with Torrens’ short-term funding requirements during the offer period.