Emperor Mines (EMPMY-O, EMP-A) has found its buyer in Intrepid Mines (IAU-T, IAU-A), which has proposed a merger deal that values Emperor at $62 million.
Intrepid is offering one of its shares for every 4.25 Emperor shares, under a plan of arrangement that would also see DRDGold (drooy-q) sell its 79% shareholding in Emperor. Emperor and DRDGold have already reached an understanding that the sale of the control block will be “orderly.”
Emperor’s main asset now is the Tujuh Bukit gold-copper project in southeastern Java, Indonesia, where it has an option to earn a 51% interest in a 116-sq.-km property held by local company Indo Multi Niaga and an offshore private company, IndoAust Mining. It earns the majority interest by funding A$5 million in work over five years, then can increase its interest to 70% by funding additional work.
Emperor stated its intention to sell its one producing asset, the Tolukuma gold mine in Papua New Guinea, in September. Tolukuma produced 44,181 oz. gold during the year ended June 30.
Emperor also sold the Vatukoula gold mine, in Fiji, along with a package of Fijian exploration assets, to private Australian company Westech Gold in March, and got $255 million in cash from Barrick Gold (ABX-T, ABX-N) for its 20% interest in the Porgera gold mine in Papua New Guinea in August.
It distributed about A$52 million to shareholders after the Porgera sale, and now has about A$70 million ($60 million) in cash. It lost A$237 million on revenues of A$97.5 million in its financial year 2007 (ended June 30), against a A$27.2-million loss on A$127.7 million in revenues in financial 2006.
The plan of arrangement will need shareholders of both companies to approve it and would also need the consent of the Toronto Stock Exchange and the courts. The companies plan an Emperor shareholder meeting in early December for closing in January 2008.
Intrepid’s chairman Colin Jackson would be the chairman of the new company’s board, with Emperor’s Brad Gordon as Brisbane, Australia-based chief executive and Intrepid’s Laurence Curtis as the Toronto-based president.
Intrepid also extinguished a $5.3-million convertible note, issuing 17.2 million shares and 2 million options, the latter exercisable at A36 for two years.
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