An independent expert report has come down in favour of Sirius Resources' $200 million cash-and-scrip deal with Mark Creasy to mop up ownership of its Nova-Bollinger product.
Mr Creasy will be paid about $28 million in cash and 70.6 million Sirius shares in exchange for his 30 per cent interest in the tenements underlying Sirius' major nickel discovery in the Fraser Ranges east of Norseman.
The prospecting legend's holding in Sirius will increase from 17.4 per cent to just below 35 per cent under the deal, which frees Mr Creasy up from the obligation to commit his own funds to the development of Sirius' Nova project.
BDO's independent report to shareholders said the share issue was "not fair, but reasonable". The scrip component of the deal fell short of a "fair" recommendation as the "value of a share on a minority basis following the proposed transaction is lower than the value of a share on a controlling basis prior to the proposed transaction".
The report said shareholders were not sufficiently compensated for the loss of control as a result of the deal.
But after weighing up the full ramifications, BDO said it was value accretive to other shareholders. It was "reasonable" as the equity-for-land swap lessened the development risk of Nova and would make it easier for Sirius to negotiate debt funding for the project.
Sirius shareholders will vote on the transaction on May 9.
Shares in Sirius were up 10Â¢, or 4 per cent, to $2.42 at 11.45am.