Vancouver's Selkirk Metals Corp. (TSX-V:SLK) plans to merge with Vancouver-based Imperial Metals Corp. (TSX:III) in a cash and share deal worth approximately $10.4 million.
The merger will pair Imperial Metals' development, operating and financial capabilities with Selkirk's portfolio of development stage and advanced exploration projects in B.C.
The new entity will be virtually debt free and will use cash flow from existing operations to further explore and develop an expanded mineral asset base, including the Ruddock Creek and Catface Project, which has been more difficult because of the current economic environment.
Under terms of the letter of agreement, Selkirk shareholders will receive $0.12 in cash for every Selkirk share, or one Imperial common share for every 30 Selkirk shares. Imperial plans to issue no more than 2.2 million shares in connection with the deal, with the remainder of the purchase price to be paid in cash to shareholders.
The deal is expected to close in October 2009, subject to completion of due diligence by both parties, execution of a definitive agreement, as well as shareholder and regulatory approval.
Selkirk's share price range during the past week: between $0.11 and $0.12; 52-week high: $0.305; 52-week low: $0.035.
Imperial's share price range during the past week: between $3.97 and $4.10; 52-week high: $8.14; 52-week low: $0.93.