Tolga Kumova-backed Aston Minerals (ASX:ASO) has sought a ‘merger of equals’ with fellow small cap Torque Metals (ASX:TOR) to build a gold play with a sizable resource and a dominant +1,500km2 land position in two main mining jurisdictions.
Torque, which has a market capitalisation of $30.7 million, and Aston, which has a market capitalisation of $13 million, jointly announced this morning (28 January) they had agreed to a merger whereby Torque will acquire 100% of Aston in an all-scrip transaction.
The merger offer is one Torque share for every 5.2 Aston shares, equating to $0.01 per Aston share. On completion, shareholders of each company will own 50% of the merged entity. Torque will also make offers to acquire certain of the existing Aston unlisted options.
The news was well received by the market, with Torque advancing over 24% to an early intra-day high of $0.072 and Aston surging nearly 78% to an intra-day peak of $0.016.
Torque has enlisted Euroz Hartleys as financial adviser and Allion Partners as legal adviser for the proposed transaction, while Steinepreis Paganin is acting as legal adviser to Aston.
Kumova is a non-executive Director of Aston and a well-known and successful small cap resources investor, as well as an experienced director in the mining sector.
A former young rich lister, Kumova has had successes with several junior mining companies including Syrah Resources (ASX:SYR), which he led from a micro cap explorer to an ASX 200 graphite producer.
Kumova and fellow high-profile small cap investor Evan Cranston will inject $1 million into Torque at $0.05 per share in a placement associated with the merger.
The larger company will have a portfolio comprising 1.75 million ounces of gold across two exploration projects, with a dominant land position, and pro-forma cash of over $5 million to fund ongoing gold exploration activities.
Torque Managing Director Cristian Moreno tells Mining.com.au he took the Torque story to Kumova and Cranston a couple of months ago and they liked what they heard.
“They did extensive, extensive due diligence into Torque Metals and the Paris Gold Project because they have experience in other gold companies,” he explains.
“They really got interested about the potential of Torque, and they said ‘look, we want to work with you’.”
Moreno says Kumova and Cranston want to build the market profile of the 1.5-million-ounce Edleston Gold Project in the renowned Abitibi Greenstone Belt of Ontario.
“They got very interested when they checked and inspected everything about the Paris Gold project,” he says.
“They validated what I have been telling the market: that we have a very fantastic project, we just need to drill, drill, drill.”
Torque’s Paris Project hosts 250,000 ounces in the Western Australian Goldfields.
The attraction for Aston Managing Director Russell Bradford was the scale potential of the project.
“This project boasts a dominant land package in the highly productive Western Australia Goldfields, with an outstanding resource grade of 3.1g/t gold and significant potential to expand into a major high-grade deposit,” he says.
“Its strategic location, surrounded by prominent producers and explorers such as Goldfields, Westgold, Northern Star, Vault Minerals, and Astral Resources, underscores the quality and opportunity this project represents.”
Moreno tells this news service the most important thing about this tie-up is not only receiving 1. 5 million ounces of gold from Canada in a “tier-one jurisdiction”, but also the market support of people like Cranston and Kumova.
“They are very, very well known in the market for being very, very successful directors, and I believe that with their collaboration, Torque Metals will have a very strong board of directors and a very strong market following.”
Cranston has already been appointed to the Torque board and on completion of the merger, Kumova will join him. Moreno will remain as Managing Director and Andrew Woskett will also continue in his role as Chairman. Two of Torque’s directors will step down.
Aston directors unanimously recommend that all shareholders and option holders vote in favour of Torque’s offer, in the absence of a superior proposal.
Aston has agreed to provide Torque with a working capital facility of up to $1.2 million, and up to a further $500,00 if required, to assist with costs incurred by Torque with respect to the proposed merger and working capital while the deal is being finalised.
If the merger goes ahead, it is expected to be completed by late April or early May 2025.
Write to Angela East at Mining.com.au
Images: Torque Metals
