RTG Mining and Sierra Mining have announced plans to merge the two resources companies.
Under the agreement the two companies will exchange shares at a ratio of three RTG shares for each Sierra share held, plus one RTG option for every three Sierra shares held.
According to RTG this equals approximately 30 cents per Sierra share, with an approximate value of $69.85 million.
Sierra mining currently has around 232.85 million shares on the market, and a market cap of $60.54 million.
The newly merged company will focus on Sierra’s Mabilo and Bunawan projects in the Philippines.
Bunawan is located near Medusa Mining’s high grade Co-O gold mine.
As part of the merger RTG will seek a listing on the ASX.
The merger is fully supported by Sierra’s directors.
Regarding the announcement, RTG CEO Justine Magee said “the acquisition fits with with our strategy of targeting projects with low technical and project risk where we can add value through rapid and successful development and optimisation”.
“RTG’s strong financial position, technical expertise and track record of building mines responsibly and efficiently in the Philippines positions us to rapidly advance the Mabilo project and maximise value.”