Newly minted Perpetual Resources (ASX: PEC) and Neo Resources (ASX: NER) have agreed to a merger under which Perpetual plans to acquire all of the shares in Neo via a scheme of arrangement.
Perpetual might have set a new record for takeover activity for a new entrant to the ASX ranks, just listing on 28 February 2013.
This followed an IPO offering 10 million shares at $0.20 to raise a minimum of $2 million, and oversubscriptions possible for another $1 million.
Neo shareholders will receive one Perpetual share for every four Neo shares held which, based on the closing share price of Perpetual shares on 24 April 2013, represents a current value of $0.053 per share.
Neo last traded at $0.014.
The proposed transaction is subject to a number of conditions, including approval of the scheme by Neo shareholders. Neo’s Board have unanimously recommended that shareholders accept the deal.
The merger will provide Neo with funds to continue to develop its Wiagdon Thrust gold project in the Lachlan Fold Belt of New South Wales, with Perpetual having the financial capacity to fund operations on its own Atoz coal project in West Sumatra as well as Neo’s Wiagdon Thrust Project.
Perpetual has agreed to advance Neo $350,000 to continue work on the Wiagdon Thrust project.
Neo’s sole asset is its 70% interest in the Wiagdon Thrust Joint Venture it has entered into with Oroya Mining (ASX: ORO).
The project comprises 11 contiguous exploration licences over an area of about 2,000 square kilometres in the Lachlan Fold Belt.
Recorded past production from adjacent or included historical goldfields exceeds 2.1 million ounces of gold.
Specifically, the Wiagdon Thrust Project area lies within the north-eastern part of the Hill End Trough which is noted for its gold and base-metals mineralisation.
Major thrust fault
The Wiagdon Thrust, from which the joint venture takes its name, is a major thrust fault which extends north to south – becoming the Mudgee fault north of Aarons Pass Granite – along the full coverage of the licences.
This major structure, and its splay faults, dominates the regional and local geology and much of the gold and base metal anomalism defined by Oroya, as well as a number of historic workings, are spatially associated with this structure and almost certainly controlled by it.
Neo’s primary objective at the project is to define large tonnage disseminated gold deposits.
A large number of gold and gold-antimony prospects and alluvial gold deposits exist within the project area, but to date there has been only very limited or no modern gold exploration.
Focus
The company is focused on implementing an accelerated exploration and development program on its Atoz coal project, which has an approved Production Licence.
Quality of the anthracitic coal is about 7,400kcal/kg based on two assays.
The potential of the project is enhanced by the fact the geological setting of the pits is identical indicating one coherent target zone.
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