IMX Resources (ASX: IXR) and joint venture partner Continental Nickel (CVE: CNI) are edging that much closer to a merger, under the previously announced plan for IMX to acquire all of the shares in Continental Nickel (IXR 37.2%) that it does not already own.
Continental has been granted approval from the Ontario Superior Court of Justice in Canada to call a special meeting of shareholders to approve the proposed business consolidation of the two companies.
The plan is to bring all of IMX and Continental’s activities under one single entity to simplify the structure of the two companies and reduce the complexities associated with bringing the Nachingwea Nickel Copper Project in Tanzania into production.
The consolidation of IMX and Continental will take the market capitalisation of IMX Resources to about A$100 million, up from $43 million at present.
The combined company will feature dual ASX and TSX listings, giving access to a broader investor base, and an attractive asset base and growth pipeline.
In addition, with a cash balance of more than $15 million coupled with ongoing operating cash flow from Cairn Hill, the company will have greater funding and development capabilities going forward.
Business combination agreement
IMX holds about a 37% interest in Continental. Under the definitive arrangement agreement, IMX will acquire all of the issued and outstanding common shares in the capital of Continental.
The company is offering Continental shareholders 3.7 IMX shares plus 0.5 of an ordinary share purchase warrant for each Continental share held.
Each full warrant entitles the holder to acquire one IMX share at A$0.60 or C$0.62, expiring three years from completion of the transaction.
The special meeting of shareholders is scheduled to be held at 10am on Wednesday, 12 September 2012.
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