Written on the 22 July 2010


CONQUEST Mining Limited (CQT) has offered a further $9.98 million to takeover North Queensland Metals Limited (NQM), with Brisbane-based NQM expected to make a decision next week.

NQM CEO John McKinstry says while Conquest’s offer is worth less than the recent off-market proposal from Heemskirk Consolidated Limited (HSK), the cash component may appeal to shareholders.

The Conquest proposal is worth $62.9 million and Heemskirk $83.8 million.

“Conquest have shown that they aren’t going to give up without a fight and while it doesn’t match on paper what Heemskirk have proposed, because it’s got cash it could be a bit different,” McKinstry told brisbanebusinessnews.com.au.

“The board will be considering the proposal and the market will probably hear something about it next week.”

Conquest’s cash and scrip offer includes half a CQT share plus 15 cents for every NQM share held, which amounts to 31.5 cents per share. But Heemskirk has offered 1.2 HSK shares for every NQM share, which equates to 42 cents per share.

Today’s NQM share price is still above the CQT offer at 32.5 cents.

“The market has been fairly soft but it’s a good indication of whether an offer is reasonable,” says McKinstry.

Conquest executive chairman Jake Klein pitched the deal on the ‘certainty’ of a cash offer and the growth potential of the proposed merger.

“Conquest and NQM are a natural fit. The combination of a stable gold production platform at Pajingo and an exciting development-stage project at Mt Carlton creates a gold company with the major attributes that investors are seeking – cashflow, organic growth and exploration upside,” says Klein in a statement to the ASX.

“The company will have no debt, no hedging and available cash reserves of approximately $40 million. In addition, the 15 cents per share component of the offer provides NQM shareholders with an opportunity to monetise a significant portion of their investment whilst retaining upside to an exciting new and growing gold company.”






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