Siren Gold Rejects Revised Merger Proposal from Federation Mining

Siren Gold (ASX:SNG) confirmed in a Monday (October 28) press release that it has rejected a revised merger proposalfrom Federation Mining, a privately held Australian company.

According to Siren, the proposal it received from Federation on October 25 outlines “indicative but incomplete terms” regarding a proposed merger through which Siren would acquire all Federation's shares.

Among other points, Federation proposed a placement of Siren shares to Federation at an issue price of AU$0.20 per share to raise AU$4.5 million. Federation also called for the termination of an existing share purchase agreement between Siren and Rua Gold (TSXV:RUA,OTCQB:NZAUF), a New Zealand-focused exploration company.

Additionally, the proposal outlines an exchange ratio of 0.96 Siren shares for every Federation share after the conversion of all existing convertible notes held by Federation’s major shareholder, AustralianSuper.

Siren said its participating board members are concerned that the proposal is “non-binding and highly conditional,” and is subject to the signing of a definitive agreement for the acquisition.

The company added that the termination of its existing transaction with Rua would be a significant risk, especially since the associated costs that come with it are “not acceptable in the circumstances.”

Siren said on October 17 that Rua had made an improved offer to buy the Reefton project.

In its rejection statement, Siren also highlights that the proposal does not contain any information on the value of its projects, including the existing global mineral resource estimate and significant exploration upside.

Siren added that the board came to its decision without Managing Director Victor Rajasooriar, who has a material personal interest in the matter because he holds performance rights.

With a focus on New Zealand's Reefton Goldfield, Siren's portfolio includes the potential for seven individual mining areas. Sams Creek has the largest resource estimate, amounting to 824,000 ounces at 2.8 grams per tonne gold.

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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.