Universal Coal

MHM Metals has proposed a merger with Alliance Mining Commodities to create a new ASX-listed direct shipping bauxite company. MHM Metals has entered into a merger term sheet with Alliance Mining Commodities, a privately owned Bermudan company that owns a 90% interest in the world class Koumbia bauxite project in the Republic of Guinea.

The proposed merger with AMC follows an extensive review of available investment opportunities in the resource sector that can provide an opportunity to apply MHM Metals’ balance sheet and management expertise to generate returns for shareholders.

MHM believes that the proposed merger with AMC provides a unique opportunity to use MHM’s existing management’s experience in the development of bulk commodity and infrastructure projects to create a new, ASX-listed direct shipping bauxite producing company in the short to medium term.

The proposed merger will be implemented by way of a scrip exchange whereby MHM will acquire 100% of the shares in AMC in exchange for the issue of MHM shares to existing AMC shareholders at an indicative merger ratio of 15% MHM:85% AMC, subject to MHM maintaining net assets of not less than $7 million at the time of signing the transaction documentation.

MHM and AMC have agreed to an exclusivity period of eight weeks (subject to a fiduciary carve-out) to enable both parties to complete their respective due diligence enquiries and to finalise the binding terms of the proposed merger.

AMC’s main asset is a 90% interest in the Koumbia project in Republic of Guinea. Itt is located in the world renowned Boke Bauxite belt of Guinea, a globally significant region for premium quality direct shipping bauxite. The remaining 10% interest in the project is held by the government of Guinea.