The NTM Gold Ltd (ASX:NTM) share price is rocketing higher after announcing plans to merge with Dacian Gold Ltd (ASX:DCN)…
The post NTM Gold (ASX:NTM) share price rockets 44% higher on Dacian (ASX:DCN) merger plan appeared first on Motley Fool Australia. –
The NTM Gold Ltd (ASX: NTM) share price was rocketing higher this morning before the Australian stock exchange paused trading.
The Western Australia-based gold-focused mineral exploration company’s shares were up a massive 44% to 12.5 cents before the pause.
Why was the NTM Gold share price rocketing higher?
Investors were buying the company’s shares this morning after it announced a merger with fellow Western Australia-based gold miner Dacian Gold Ltd (ASX: DCN).
According to the release, the two parties have entered into a binding scheme implementation deed, under which the two companies will merge by way of a scheme of arrangement.
Management believes the merger will combine two complementary West Australian gold companies, leveraging Dacian’s operational expertise and processing infrastructure to unlock the development potential of NTM Gold’s Redcliffe Gold Project through regional consolidation.
Under the terms of the scheme, each NTM Gold shareholder will receive 1 Dacian share for every 2.7 NTM shares held at the scheme record date. Based on Dacian’s last close price of 35 cents, this equates to ~12.96 cents per share.
Post-merger, shareholders of Dacian and NTM will hold 68.4% and 31.6%, respectively, of the merged company.
The NTM board unanimously recommends that its shareholders vote in favour of the scheme. This is in the absence of a superior proposal and subject to an independent expert deciding that the scheme is in the best interest of shareholders.
NTM shareholders, including all directors and the two largest shareholders, Empire Resources Limited (ASX: ERL) and DGO Gold Limited (ASX: DGO), representing a combined voting interest of 32.9%, intend to vote all the shares that they hold in favour of the scheme, in the absence of a superior proposal.
Dacian Gold’s Managing Director, Leigh Junk, commented: “This merger will create value by delivering on our strategy of extending mine life, diversifying our production base and increasing operational flexibility at Mt Morgans.”
“This is a logical step for Dacian to expand operations in our region by unlocking resources within haulage distance of our substantial processing infrastructure, enabling future resource and reserve additions to be brought quickly into production.”
“The merger with NTM creates an industry leading portfolio of advanced exploration targets underpinned by potential high-margin, low capital intensity development opportunities, which would significantly expand Dacian’s production profile through the addition of high-grade deposits to our operating plan, further future proofing our business,” he concluded.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
- Is the Blackmores (ASX:BKL) share price in the buy zone
- ASX trading halt to remain in place for the rest of the day
- Tyro (ASX:TYR) share price flat on positive weekly EFTPOs update
- Is the BWX (ASX:BWX) share price a buy?
- Why the Medusa (ASX:MML) share price is edging lower today
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.