Bendigo Mining (ASX: BDG) and BCD Resources (ASX: BCD) are joining forces to create a mid-tier gold company which can work on the Beaconsfield Gold Mine in northern Tasmania. BCD Resources was formerly known as Beaconsfield Gold.
As per the deal outlined in the implementation agreement Bendigo Mining will acquire all the shares of BCD Resources and BCD Resources will get an $8 million loan to expand the Beaconsfield Gold Mine.
The new funds will help BCD Resources to develop the Beaconsfield Gold mine in Tasmania to its full potential. Bendigo Mining is offering 14.4 cents per BCD Resources share which is a 44% premium on BCD's last closing price. Shares of BCD Resources were worth 10 cents when a trading halt was announced last this week and are trading at 12 cents, today 1pm.
The combined market capitalization of the new company formed by the merger would be $162 million. Both companies will put the proposal to shareholders soon. The merger is likely to be approved by BCD shareholders in a meeting in November.