The board of Torrens Mining has recommended the acceptance of a $23 million offer to merge with Coda Minerals, its partner in the Elizabeth Creek copper project in South Australia. The deal is now subject to the approval of the company’s shareholders. Coda is offering 0.23 shares to every Torrens shareholder to consolidate ownership of the project under one roof.
Just prior to Christmas the partners unveiled the maiden mineral resource for the Emmie Bluff copper-cobalt deposit at Elizabeth Creek of 43 million tonnes going 1.3 per cent copper, 470 parts per million cobalt and 11 grams per tonne silver that cemented its position amongst the largest known sediment hosted copper deposits in Australia.
Interestingly, Torrens brought Coda into Elizabeth Creek as a farm in partner in 2017.
The Torrens board has unanimously recommended its shareholders accept the offer, a 30 per cent premium to yesterday’s closing price and to its 10-day volume weighted average price.
Shares in Torrens were up 20 per cent in intraday trading to 18c whilst Coda eased slightly, trading at 85c after closing yesterday at 87.5c.
Coda said over 40 per cent of Torrens shareholders had already indicated they would support the deal, including the 26 per cent tranche owned by the directors. Potentially the Torrens shareholders could end up with around 21 per cent of the enlarged Coda, that its board claims would have a market cap of $109m on a fully diluted basis.
The company said the deal would deliver significant strategic and financial benefits by simplifying ownership and streamlining management of the project. It also signalled the new Coda would have increased scale, market relevance, funding capability and trading liquidity.
According to management Coda would also loan Torrens up to $2m to assist its funding requirements through the offer period.
Coda Minerals Chief Executive Officer Chris Stevens, said:
“The combination with Torrens provides a compelling opportunity to create value for both sets of shareholders by unlocking important synergies in the exploration and development of our core asset, the Elizabeth Creek Copper Project in South Australia.”
The maiden Elizabeth Creek resource calculation boosted the combined tonnage to 1.1 million tonnes of contained copper equivalent across the Windabout, MG4 and Emmie Bluff copper-cobalt deposits at the project.
Emmie Bluff is one of the very few nickel-independent sources of cobalt in Australia according to the company. Coda says the cobalt is hosted in the mineral carrolite, that is relatively easy to recover and process using simple conventional methods.
The explorer only listed on the ASX in October 2020 but sent pulses racing in June 2021 when it struck iron oxide copper gold, or “IOCG” mineralisation at Emmie Bluffs Deep, only 400 metres south-west of the original Emmie Bluff deposit.
Uncovering the Emmie Bluffs Deep IOCG orebody sent the Coda share price hurtling from $0.40 to a high of $1.75.
The partners have already commenced scoping level studies into mining and processing the Emmie Bluff deposit that will form the basis of a full pre-feasibility study across the three sediment hosted copper-cobalt deposits.
Both Coda and Torrens are convinced streamlining the ownership and management of Elizabeth Creek will benefit all stakeholders. Coda appears to make a compelling case and the Elizabeth Creek project might gain some momentum should the deal get the green light from shareholders.
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