PERTH (miningweekly.com) – ASX-listed Adriatic Metals has inked a binding letter of agreement with TSX-V listed Tethyan Resource that will see Adriatic consolidate its position as a leading Balkan polymetallic explorer and developer.
Under the agreement, each Tethyan shareholder will receive 0.166 Adriatic shares for each of their Tethyan shares held, resulting in Tethyan shareholdings holding a 6.9% interest in Adriatic.
The offer implies a price of 18.4c each for Tethyan shares, valuing the company at C$14.7-million.
Adriatic on Monday pointed out that the offer represented a 29% premium to Tethyan’s closing price on May 8, and a 41% premium to the company’s five-day volume weighted average share price.
“Tethyan Resource has been successful in consolidating the Raska district in Serbia, and with the recent addition of the Kizevak and Sastavi licences, the acquisition presents a unique opportunity for Adriatic to add assets to our portfolio that have the potential, over time, to match the quality of our exceptional Vares project, in Bosnia,” said Adriatic MD Paul Cronin.
“In a short time, Adriatic has built a significant presence in the region, by developing our assets with a very competent team at the helm. Applying our team and strong balance sheet to Tethyan’s asset positions us well to proceed through the project development cycle.
“These are past producing mines, and the historical data we have reviewed provides ample confidence that we are adding significant value to our portfolio with minimal outlay and dilution to our existing shareholders.”
In conjunction with the takeover transaction, the two companies have also struck a convertible loan agreement, under which Adriatic would advance Tethyan a secured convertible loan of up to €1.3-million in tranches, to be used by Tethyan to finance of Serbian company EFPP, which holds two exploration licences comprising the central parts of the Kizevak and Sastavi deposits.
The funds will also be used to fund confirmation drilling at Kizevak and to meet transaction costs.