PERTH (miningweekly.com) – The nonexecutive chairperson of metals recovery specialist Metals Finance, Geoff Hill, on Thursday flagged the possibility of a merger with US- and Canada-focused Texas & Oklahoma Coal Company (TOCC).

Hill pointed out to shareholders at the company’s annual general meeting that the company would need to evolve in order to survive the current market conditions.

“Metals Finance is in a difficult position as we have limited options and limited financial capability,” he said.

“It is clear that, if we are to survive, Metals Finance needs to change both its business strategy and its operations to make best use of our cash resources and to acquire a new operation and activity which has both market interest and considerable upside potential.”

Hill, who is also the chairperson of TOCC, noted that over the last three years, the unlisted TOCC had acquired a portfolio of coal exploration and development projects, and also had an option to acquire a producing coal mine in Oklahoma.

“TOCC would bring significant upside potential as the coal projects are advanced, located in prime coal areas and have scale. The potential of the North American coking sector has already been recognised by a number of other listed Australian companies.”

Hill noted that Mining Finance’s independent directors were currently examining the merger proposal, which would also be subject to an independent assessment.

Full details of the proposal would be made known to shareholders once it has been finalised.

Metals Finance holds an interest in several development projects across a range of metals, including nickel. The company has been trying to unload its shareholding in the Chambishi copper/cobalt tailings project, in Zambia, without success to date.

The company was also a major shareholder in embattled junior Bass Metals, and called for the removal of that company’s board after share prices dropped dramatically.

Metals Finance director Rick Anthon was appointed as chairperson of Bass in November.