Int’l Annax teams with Aussie miner Herald

Vancouver — International Annax Ventures (IAX-V) has inked a deal with its controlling shareholder, Australian-based Herald Resources, to become its wholly owned subsidiary.

According to the deal, Herald will acquire all the issued and outstanding common shares of Annax in return for Herald shares. Each Annax share will be exchanged for one Herald share.

All of the outstanding options and warrants to buy common shares of Annax will be converted into options or warrants to buy shares of Herald on the same terms. Herald’s board of directors will remain the same.

Annax’s principal asset is the Dairi zinc project in Indonesia, 120 km south of the town of Medan. The property comprises a seventh-generation contract of work covering 220 sq. km and a Kuasa Pertambanggan (land permit) of 136 sq. km.

For the past year, Annax has been advancing the Anjing Hitam zone. The last round of drilling outlined an indicated resource of 7.5 million tonnes grading 16.7% zinc, 10.3% lead and 14 grams silver per tonne. The inferred resource is 2.5 million tonnes grading 11.3% zinc, 6.8% lead and 13 grams silver, and the zone remains open along strike and downdip to the east.

Mineralization is hosted in a 30-to-140-metre-thick sequence of carbonaceous shales and siltstones that strike northwest and dip 35-60 to the northeast.

The mineralized beds appear to flatten out at depth. Annax holds an 80% interest in the project, with the remainder held by PT Aneka Tambang, Indonesia’s state-owned mining company.

As a result of a 50% drop in the zinc price since 1997 and strong investor resistance to Indonesian-based projects, Annax has had difficulty attracting financing and market interest. To survive, the junior turned to Herald Resources for its equity financing needs; as a result, Herald currently owns about 72% of the issued shares of Annax.

Before the deal closes, International Annex intends to sell Herald up to 1 million Annax units priced at 23 each. A unit will consist of one share of Annax and one non-transferable 12-month warrant; the warrant will entitle the owner, Herald, to buy one additional share of Annax at 23 per share. The proceeds will be used to fund costs associated with the merger, which has yet to be approved by shareholders and regulators.