Not sure about Bullseye, but no doubt we will get a substantial update to explain the huge (and they are huge) benefits of the merger. I'm not to fussed with the actual deal as in the end its the long term SP that matters to me, not the short term stag opportunity on MKO.
A more generous offer from EAR just means less EAR upside, while a less generous offer, means more EAR upside. So in the long term it all evens out (again if you are in it for the long term).
From The Australian:
Echo, Metaliko to merger to create new gold miner
PAUL GARVEY
Junior gold plays Echo Resources and Metaliko are poised to merge in a deal that will pave the way for the creation of a new Australian gold miner.
Echo (EAR) and Metaliko (MKO) both entered trading halts this morning pending the announcement of a “material transaction”.
A merger of the two — which would have a combined market capitalisation of around $70 million — would solve the major issues faced by each company on their own.
Echo owns a large exploration portfolio in the Yandal Belt of Western Australia and has carried out a scoping study over its Julius gold discovery, but does not have an obvious processing option for the deposit.
Metaliko, meanwhile, owns the old Bronzewing processing plant but is light on for resources to process through it.
The combination would allow the enlarged group to expedite the development of Julius and its processing through Bronzewing. If all went to plan, it would then be generating plenty of cash to pump into exploration through Echo’s extensive Yandal Belt holdings.
Echo last traded at 22c and Metaliko shares last changed hands at 7.1c.
GOLDFIELDS neighbours Echo Resources and Metaliko Resources are expected to announce a merger after both calling trading halts.
The two junior gold players are expected to announce a scrip merger deal tomorrow.
The companies are similarly sized – Echo has a market capitalisation of around $A38 million, while Metaliko is valued at $31.3 million.
Metaliko holds the Yandal gold project in the north-eastern Goldfields, which includes the Bronzewing mill, while Echo holds the nearby Julius deposit, which has a 197,621 ounce gold resource.
The link between the two companies is Metaliko managing director Dr Michael Ruane, which holds more than 30% of Metaliko and 7.6% of Echo.
Earlier this year, Ruane successfully rolled the board of Metaliko in what was thought to be an attempt at the time to gain control of Echo’s Julius deposit for feed for the Bronzewing mill.
At the same time, Metaliko has been working on a restart of Bronzewing using its 126,000oz Corboys deposit.
Metaliko last traded at 7c, while Echo closed at 22c yesterday.
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