Australia's Southern Cross Goldfields (ASX: SXG) and Polymetals...

Australia's Southern Cross Goldfields (ASX: SXG) and Polymetals Mining (ASX: PLY) plan to merge, reports the Sydney Morning Herald.

The two miners describe the resulting entity as a significant diversified gold company with the ability to join the ranks of mid-tier producers in the near term.

According to Proactive Investors Australia, the merger's end result will be a $30-million market capitalized company with combined cash of $13 million and debt of about $7 million.

The new company's resource will be 1.7 million gold ounces,with an ore reserve of 254,000 gold ounces, plus an emerging production profile of up to 69,000 ounces per year via the Marda and Mt Boppy projects. Production is expected to start next year

http://www.mining.com/australian-merger-creates-mid-tier-gold-producer-69606

Southern Cross Goldfields, Polymetals Mining to merge
Monday, April 08, 2013 by Angela Kean


Southern Cross Goldfields, Polymetals Mining to merge

Southern Cross Goldfields (ASX: SXG) and Polymetals Mining (ASX: PLY) are planning a “merger of equals” via a Scheme of Arrangement.

The deal will see Southern Cross offer 11 shares for every 1 Polymetal share, valuing the transaction at just under $11 million.

Southern Cross shareholders will collectively hold around 47% of shares in the merged company, while Polymetals shareholders will hold 53%.

The end result of the merger will be a $30 million market capitalised company with combined cash of $13 million and debt of about $7 million.

The merged entity will have a Resource of 1.7 million gold ounces, an Ore Reserve of 254,000 gold ounces and an emerging production profile of up to 69,000 ounces per annum from the Marda and Mt Boppy projects.

Production is slated to start in 2014.

Post-merger, the combined company will also own a fully permitted 600,000 tonne per annum CIL gold treatment facility and associated infrastructure currently located at Sandstone in Western Australia.

The combined exploration portfolio will comprise 4,500 square kilometres in Western Australia, within the underexplored Southern Cross and Sandstone greenstone belts and the Pilbara region.

Other assets include 200 square kilometres in the highly prospective Lachlan Fold Belt of New South Wales and 700 square kilometres in the Curnamona Province of South Australia.

Additional benefits of the proposed merger include an accelerated development timetable for the Marda and Mt Boppy projects.

http://www.proactiveinvestors.com.au/companies/news/41707/southern-cross-goldfields-polymetals-mining-to-merge-41707.html