Melior and Metallica point fingers as merger falls apart

According to Mining News Pro - The two companies in September last year struck a binding merger agreement to create a diversified Queensland mining company, which will combine mineral sands and bauxite assets.

Under the terms of the agreement, Metallica would have acquire all of the issued and outstanding common shares of Melior in exchange for Metallica ordinary shares at an agreed exchange ratio of 20 Metallica shares for every one Melior share.

The proposed merger was expected to close at the end of December, however,  Metallica said on Wednesday that the conduct of Melior, including breaches of representations, warranties and covenants in the arrangement agreement surrounding the company’s debt covenants, was a ‘significant contributing factor’ to the conditions precedent to the completion of the merger not being satisfied on time.

Metallica said that that it would evaluate potential recourse for damages caused by Melior’s breaches.

Melior for its part has told shareholders that the company’s right to terminate the agreement had arisen out of Metallica’s ‘failure to perform certain covenants and obligations’ required under the agreement, resulting in certain conditions precedent being incapable of being satisfied.

With the merger agreement now terminated, Melior said that it would continue to focus on the ramp-up of production at its Goondicum ilmenite and apatite project, in Queensland, and would seek its own listing on the ASX.