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09/12 - Unity Mining agrees to A$33m takeover.

junior Unity Mining has executed a scheme implementation agreement with Diversified Minerals, which would result in the shareholder acquiring all the shares in Unity.

Diversified Minerals, which held a 13.69% interest in Unity, was offering 2.9c for the shares it did not already own, the gold junior reported on Monday.
The offer would comprise 1c a share to be received through an equal capital reduction and 1.9c a share as scheme consideration for Diversified Minerals.
Unity told shareholders that the total consideration represented a 45% premium to the company’s last closing price on December 4, and a 128% premium to the 12-month volume-weighted average price, implying a value of A$33.2-million to the company.

Unity chairperson Clive Jones pointed out that throughout the second half of 2015, Unity had initiated an internal assessment of its strategy in light of the decision to cease production at the Henty gold mine in late 2015, and to not proceed with a cyanide processing plant at the Dargues gold projects.
The review examined ways to maximise shareholder value, with Jones saying the company had received “several approaches” from a number of parties expressing interest in various asset transactions and other strategic initiatives.

“The strategic review has enabled the company to assess all available options and the board has concluded that the transaction [with Diversified Minerals] is superior to all alternatives, having regard to the certainty which the transaction delivers to shareholders and the value which is being recognised for Unity’s assets over and above its underlying cash position.”

Jones said that based on the proposed transaction timeline, over an approximate six-month period, Unity shareholders would have received a total of 3.4c in cash back from the company, taking into account the capital return concluded in September this year.

“Underpinning the strategic review was the board’s concern that capital markets remain challenging for the junior resources sector, and Unity was entering into a period where revenue will have ceased and substantial capital would be needed going forward to fund its existing portfolio of assets.”
Jones added that the proposed transaction removed exposure to the development and funding risks for Unity shareholders regarding the Dargues gold project and the Henty project, and provided shareholders with an opportunity to realise value for their shares.

The Unity board has unanimously recommended that shareholders accept the offer, which was subject to a number of conditions, including shareholder approval, an independent expert evaluation of the offer, and other customary conditions.

The transaction was not subject to any financing, due diligence or regulatory approvals, other than those associated with implementing the scheme of arrangement.

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