Independence Group to buy Sirius Resources for $1.4 bn
26 May 2015
Independence Group NL has struck a deal to buy Australian nickel producer Sirius Resources NL in an A$1.8 billion ($1.4 billion) cash and stock deal.
Under the agreement, Sirius shareholders will receive 0.66 Independence shares for every one Sirius share held, and 52 cents a share. They will also receive one S2 share for every 2.5 Sirius shares held. 
The total cash-and-stock deal is a premium of 35 per cent to Sirius' closing share price on the ASX.
Sirius will undertake a demerger of its Polar Bear and Scandinavian exploration assets, which includes the recently discovered Baloo gold deposit, via a Demerger Scheme of Arrangement, allowing Sirius shareholders to retain full exposure to the value and upside of these assets in a new listed vehicle.
The vehicle will be called S2 Resources Ltd (S2) and will be led by Sirius' founding managing director, Mark Bennett.
S2 will hold the Polar Bear and Scandinavian asset portfolio currently owned by Sirius, plus approximately A$22 million cash upon listing.
Veteran explorer Mark Creasy, who holds 35 per cent of Sirius, has agreed to vote for the merger.
Shareholders will have exposure to Independence Group's portfolio of production, development and exploration projects, including the 30 per cent owned Tropicana gold mine, the 100 per cent owned Long nickel mine, and the 100-per cent owned Jaguar copper / zinc mine, as well as the 100-per cent owned Stockman copper / zinc development project.
The combined entity would have a pro forma market capitalisation of A$2.7 billion, making it a leading ASX-listed mining company.
Independence Group managing director, Peter Bradford said, "This transaction creates a leading diversified Australian mining company with an outstanding and rapidly growing production profile, a strong balance sheet, and excellent current and future cash flows. The proximity of the Sirius and Independence Group assets in Western Australia creates opportunities to realise synergies and cost efficiencies across a dominant land-holding position.
Sirius managing director, Dr Mark Bennett said, "This transaction provides a great outcome for Sirius shareholders and I am proud of what Sirius and its employees have achieved for all shareholders and stakeholders in our short history.
Sirius is the 100-per cent owner of the Nova Nickel project situated east of Norseman, where it made a nickel-copper sulphide discovery known as the Nova-Bollinger deposit.
It is also exploring on its 70-per cent owned Fraser Range Project also situated east of Norseman. Nearby, to the north of Norseman, the company is also exploring its 100-per cent owned Polar Bear project for gold and nickel, and is currently focussing on the Earlobe gold prospect in a region containing numerous world class gold and nickel mines.
The Fraser Range project is a joint venture with its major shareholder Creasy.
