Merger Risks Loom as ASO Securityholders Prepare to Vote on Scheme Arrangement

Merger Overview

Aston Minerals Limited (ASO) and Torque Metals Limited (TOR) have entered into a binding Scheme Implementation Deed to merge their businesses via court-approved schemes of arrangement. Under the terms of the merger, TOR will acquire all fully paid ordinary shares and certain options in ASO, issuing new TOR shares as consideration to ASO securityholders.

The combined group will hold approximately 1.75 million ounces of gold resources across two key projects: the Paris Gold Project in Western Australia, with 250,000 ounces at 3.1 g/t gold, and the Edleston Gold Project in Ontario, Canada, with 1.5 million ounces at 1.0 g/t gold. This merger creates a diversified gold exploration company with a dominant land position spanning approximately 1,510 square kilometers across two Tier 1 mining jurisdictions.

Board and Management Changes

Post-merger, ASO will become a wholly owned subsidiary of TOR and will be delisted from the ASX. The merged entity will be led by TOR’s Managing Director, Cristian Moreno, with a refreshed board including existing TOR directors Andrew Woskett and Evan Cranston, alongside ASO’s non-executive director Tolga Kumova. The ASO Directors Russell Bradford and Robert Jewson will resign upon completion of the merger.

Mr. Kumova, who currently holds significant interests in both ASO and TOR, will also receive incentive options upon his appointment to the TOR board, subject to shareholder approval. This new leadership team aims to drive the next phase of exploration growth across the combined portfolio.

Financial and Strategic Rationale

The merger is expected to enhance the combined group’s market presence, liquidity, and capital raising ability. The ASO Directors unanimously recommend that securityholders vote in favor of the schemes, subject to no superior proposal emerging. This recommendation is supported by an independent expert’s report from BDO Corporate Finance Australia, which concludes that the schemes are reasonable and in the best interests of ASO securityholders, although the share scheme is not considered fair but reasonable.

The combined group will benefit from complementary assets, operational flexibility, and a larger exploration asset base. The merger also provides exposure to TOR’s Paris Gold Project and ASO’s Edleston Project, both located in prolific gold regions with significant exploration upside.

Risks and Next Steps

Key risks include integration challenges, changes in market conditions, funding requirements, and the potential for a superior proposal to emerge. Both companies have agreed to exclusivity arrangements and break fees to protect the transaction.

Scheme meetings for ASO shareholders and optionholders are scheduled for 22 May 2025 in Perth, with court approval expected on 28 May 2025. If approved, the merger is anticipated to be implemented on 10 June 2025, with TOR shares issued to ASO securityholders accordingly.

Investors should carefully consider the scheme booklet and seek independent advice before voting. The merger marks a significant step in consolidating two promising gold exploration companies into a stronger, more diversified entity positioned for growth.