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Metminco to merge with Andes Resources to consolidate advanced exploration assets in Colombia

The proposed merger will create a gold explorer and developer with a dominant position in the richly gold-copper endowed Mid-Cauca Gold Belt.
merger representation
Strong support for the merger from Andes’ major shareholders

Metminco Ltd (ASX:MNC) has signed a non-binding indicative offer (NBIO) with Andes Resources Ltd in connection with a proposed merger of the two companies.

Subject to completion of the merger, the merged company will have a well-rounded portfolio of projects, from untested targets through to a potential development project in the advanced stage of permitting.

The new entity will have aggregated a dominant tenement position in the Quinchia and Andes Gold Districts of the richly endowed Mid-Cauca Gold and Copper-Gold Belt in Colombia.

Andes’ exploration ground and Metminco’s ground in the Mid-Cauca Gold Belt

Metminco and Andes have entered into the NBIO for Metminco to effect the Merger by acquiring 100% of the issued capital of Andes through an off-market takeover offer.

In addition to the merger, it is proposed the merged company will raise $4 million, which is expected to be very well-supported, given the level of in principle support already gained from key shareholders including Andes cornerstone investor, Sandfire Resources NL (ASX:SFR).

Andes, a public unlisted company, controls a highly complementary portfolio of gold-silver-copper exploration projects in the Cauca Valley, Colombia, in close proximity to Metminco’s existing resources of over 877,000 ounces gold and reserves of 457,000 ounces gold at the Miraflores deposit.

A subsection of Andes’ portfolio. Surface mapping and sampling has defined 12 targets. Much of Andes’ portfolio remains unexplored by modern techniques

Metminco also has interests in the Tesorito prospect and the large undrilled Chuscal target (in joint venture with AngloGold Ashanti (NYSE:AU), all within Metminco’s Quinchia Gold Project.

Metminco executive chairman Kevin Wilson said: “The acquisition of Andes, gives Metminco not just further exposure to a large exploration portfolio in the Mid-Cauca Gold Belt of Colombia, but also access to an experienced board, management and a new shareholder base of influential, experienced and financially strong shareholders.”

“Together with our Quinchia Gold Project we now have two exploration camps that we believe offer near term development potential.

READ: Metminco progressing well with work on Miraflores and wider exploration portfolio

“Along with the favourable restructure of our existing repayments to RMB, the transaction brings enhanced financial capacity enabling us to substantially defer debt repayments thus maximising capital towards exploration activities.”

Metminco is now conducting a placement of convertible notes to raise about $750,000 to support the merger.

Funds raised will initially be deployed towards maiden drilling of the Chuscal Gold Project, which features an extensive gold geochemical anomaly over a 900 metres x 530 metres envelope, with high-grade gold rock-chip results of up to 54 g/t gold.

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