Regulatory Hurdles Loom Over Torque Metals’ Bid for Aston Minerals

Background and Agreement Overview

In a significant development within the Australian gold mining sector, Torque Metals Limited (ASX: TOR) and Aston Minerals Limited have entered into a Scheme Implementation Agreement. This agreement outlines the terms under which Torque Metals will acquire Aston Minerals through a dual-scheme structure involving both shares and options.

The agreement, executed on 25 January 2025, details the conditions precedent that must be satisfied or waived before the schemes become effective. These include completion of a placement by Torque Metals, regulatory approvals from ASIC and ASX, court approvals, and shareholder consent from Aston Minerals.

Scheme Structure and Consideration

The acquisition is structured through two complementary schemes: the Share Scheme and the Option Scheme. Under the Share Scheme, Aston Minerals shareholders will transfer their shares to Torque Metals in exchange for new Torque Metals shares at a ratio of one new share for every 5.2 Aston shares held. The Option Scheme similarly provides consideration for Aston Minerals optionholders based on a defined transaction ratio.

Torque Metals has committed to issuing new shares that will rank equally with existing shares and to seek quotation of these shares on the ASX promptly after implementation. The agreement also addresses the treatment of fractional entitlements and provisions for ineligible foreign holders and small scheme participants, ensuring orderly handling of share issuance and sales.

Regulatory and Shareholder Approvals

Key to the transaction's progression are the regulatory approvals from ASIC and ASX, as well as court approvals under the Corporations Act. Aston Minerals shareholders and optionholders must approve the schemes at respective meetings convened by court order. The agreement includes provisions for independent expert reports to assess the schemes' fairness and benefits to shareholders, with the Aston Minerals board unanimously recommending the transaction in the absence of a superior proposal.

Governance and Board Composition

Post-transaction governance arrangements have been pre-agreed, with appointments to the boards of both companies specified to take effect on the scheme's effective date. This includes the appointment of non-executive directors Tolga Kumova and Evan Cranston, signaling a clear governance framework for the combined entity.

Timetable and Next Steps

The indicative timetable anticipates the scheme booklet's submission to ASIC for review in late February or early March 2025, followed by court hearings and shareholder meetings in mid-April. The scheme's effective date and implementation are expected by late April or early May 2025, subject to all conditions being met.

Both parties have committed to cooperate fully to satisfy the conditions precedent and to maintain business operations in the ordinary course during the exclusivity period. The agreement also includes detailed provisions addressing competing proposals, confidentiality, indemnities, and termination rights, reflecting a comprehensive framework to manage the transaction's risks and obligations.