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Gunson Resources has moved to increase its mineral sands land-holding in Tanzania in a A$2.5-million acquisition of unlisted Strandline Resources, the Miningweekly reports.
Under the terms of the transaction, Gunson would issue 166.67-million of its own shares to the 16 Strandline shareholders, with each of the shares valued at 1.5c.
A minimum of 71% of the Gunson shares issued would be escrowed for a period of 12 months, and no individual Strandline shareholder would have an interest of more than 19.99% in Gunson, post the transaction.
Strandline holds 16 granted mineral sands exploration tenements, covering more than 2 000 km2 along the Tanzanian coast, as well as two exploration applications covering another 160 km2.
Gunson MD Bill Bloking said on Thursday that the transaction was a transformational development for Gunson, as it supplemented the construction-ready Coburn mineral sands project, in Western Australia, with large-scale, highly prospective mineral sands exploration assets in an under-explored area of an established producing province.
Subject to the completion of the transaction, Gunson had also entered into employment arrangements with Strandline’s management team, and would appoint a number of the company’s current board members to the Gunson board.
“It has the potential to deliver a company-maker asset, provides a strong board and management team with an excellent mineral sands pedigree, and sets a platform for funding and ongoing market support,” Bloking said.
Subject to shareholder approval, Gunson would also issue up to 146.67-million shares, at a price of 1.5c a share, to raise A$2.2-million to fund existing work commitments at Coburn and to fund the initial phase of exploration drilling and resource estimation in Tanzania.
In addition to the placement, Gunson would also launch a share purchase plan (SPP), allowing shareholders to subscribe for up to A$15 000 in new shares, priced at 1.5c each. The SPP would raise a maximum of A$1-million.
Gunson would also change its name to Strandline Resources once the transaction was completed.