Tie-up takes in WA’s top two

Independence Group has run a ruler over many of Australia’s mining assets in recent times, but its $1.8 billion bid for Sirius Resources is not the start of a major acquisition spree, according to managing director Peter Bradford.

The friendly tie-up means Independence will have its foot firmly on two of WA’s most highly rated mining projects, adding Sirius’ under-construction Nova nickel and copper mine to its 30 per cent share of the Tropicana gold project.

The deal will create a $2.7 billion mid-tier miner, with Sirius shareholders set to emerge with about 54 per cent of the combined group.

Independence will issue 0.66 of its own shares for each Sirius shares on issue. It will also pay 52¢ a share cash.

WA prospecting legend Mark Creasy, who controls 34.6 per cent of Sirius shares, will own 18.6 per cent of the combined group. He will also be paid $74.4 million of the $214 million cash component of the offer.

Independence has been associated with almost every significant resource project in the country in recent months, but Mr Bradford downplayed suggestions the Sirius buy presages an acquisition spree.

“We have run the ruler over quite a number of opportunities, but the reality is that Sirius’ Nova asset is a significant asset that’s in the development stage,” he said. “There will be some digestion to do.”

Mr Bradford also played down suggestions from analysts the $1.8 billion price tag was at the top end of Sirius’ valuation.

He said Independence had “got the line in the sand in the right place”, but admitted the price included some expectation of further exploration success around the Nova-Bollinger deposit.

“We’re optimistic that through the integration of our geophysical expertise and the skill sets that are within the current Nova exploration team, we’ll be able to unlock addition value going forward,” he said.

Sirius shares gained 66¢, or 20.4 per cent yesterday to close of $3.90. Independence Group lost 70¢, or 12 per cent, to $5.15.