MHM, AMC sign merger term sheet to create new bauxite company

Alliance Mining Commodities (AMC), a Bermudan minerals development company has signed a merger term sheet with MHM Metals of Melbourne, Australia, reported industry sources aware of the matter. The proposed merger will be implemented by way of a scrip exchange, at an indicative merger ratio of 15% MHM and 8% AMC. The entire process is subject to MHM maintaining net assets of no less than A$7-million at the time of signing the transaction documentation.

AMC, which owns a 90 per cent interest in the Koumbia bauxite project, in Guinea, is known for its capabilities in developing bulk commodity and infrastructure projects.

The proposed merger will provide MHM with the opportunity to leverage upon the mineral company's world-class project thereby helping it to create a new, substantial ASX-listed direct shipping bauxite producing company in the short to medium term, said MHM spokesperson at a shareholders' meeting on Tuesday, November 15.

AMC has invested some A$40 million till date on exploring the Koumbia bauxite project. Investments were also directed towards completing resource delineation, a definitive feasibility study for a ten-million-tonne-a-year operation, and completing environmental- and social-impact studies.

MHM has also agreed to provide AMC with a loan facility of up to A$1.5 million to enable the company to progress with agreed development activities on the Koumbia project.

As per industry sources, the proposed merger is subject to a number of conditions, including a due diligence, regulatory and shareholder approval, and MHM completing a capital raise to enable the company to comply with the ASX listing rules.

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