AFR Article (Oct 19th 2004)...Toronto-based nickel producer...

AFR Article (Oct 19th 2004)...
Toronto-based nickel producer LionOre Mining plans to merge with MPI Mines in a $285 million deal to create the Western world's 10th biggest nickel producer.MPI shareholders will receive $1 plus shares in the enlarged nickel company and shares in a new gold company which will contain all of MPI's gold assets, principally the 100,000 ounce a year Stawell mine.The gold assets will be spun off into a new company to be called Leviathan Resources, with shareholders offered an in specie distribution equivalent to their MPI shareholding.The number of shares in Leviathan will be reduced through a 1-for-3 share consolidation to leave shares with a theoretical value of 80 ¢ each.To fund the new company, new Leviathan shares will be issued to raise $15 million through an IPO with the stock likely to be listed early next year.In total, MPI shareholders are being offered a mix of shares and cash valued at $2.48, according to LionOre Australia managing director Mark Ashley.The offer for MPI, unanimously supported by the target company's directors, will give MPI shareholders $1 in cash plus 0.1675 LionOre shares for every MPI share held.MPI listed on the Australian Stock Exchange in January last year after issuing shares at 40 ¢ each.MPI managing director Brian Phillips said yesterday the deal to merge with LionOre would "maximise the value of MPI's gold and nickel assets".The MPI board has offered its support for the deal along with MPI's two major shareholders, Merrill Lynch Investment Managers and the Lion Selection Group, which has given LionOre a 19.9 per cent launching pad for its takeover.Mr Ashley said the merger with MPI would increase LionOre's nickel production by 50 per cent to around 30,000 tonnes a year but would treble its ore reserves.