Mont Royal and Canada’s Commerce Resources propose merger to form dual-listed critical minerals developer

Mont Royal Resources (ASX: MRZ) and Toronto-listed Commerce Resources (TSXV: CCE) are confident they can attract increased investor interest in their rare earth element (REE) assets through a proposed merger.

The two companies have agreed to a transaction that will see Mont Royal acquire 100% of the issued and outstanding common shares of Commerce.

Mont Royal said the decision to undertake dual listing in Australia and Canada is aimed at attracting a broader range of investors for the merged group, increasing liquidity and achieving greater ability to raise capital.

Critical minerals developer

The merged entity will create a Québec-focused critical minerals developer and exploration company with a strong focus on rare earths, fluorspar, niobium and lithium exploration.

Its assets will include the Ashram project, rated as the largest undeveloped monazite-mineralised carbonatite-hosted REE deposit in North America.

The merged entity will also control an exploration asset package at Mont Royal’s Northern Lights project offering lithium, copper and gold potential over an area of 536 square kilometres.

Value creation

Mont Royal’s executive director Peter Ruse described the deal as a great opportunity to create value for both groups of shareholders.

“Combining the proven exploration and management skills of the Commerce and Mont Royal teams with the large resource at Ashram and the immense upside of the Mallard and Miranna niobium prospects will have the potential to unlock substantial value.”

“The merged entity will have a larger balance sheet and a Quebec-based management and technical team with extensive experience in building large resource projects, with the local connections and experience to assist in advancing our Northern Lights project.”

Unanimous board support

The boards of both companies have unanimously supported the deal.

The directors of Mont Royal have declared their intention to vote all 6.6% of the Mont Royal shares they control in favour of the transaction.

Directors and investors controlling nearly 40% of the Commerce share on issue have also entered into voting support agreements for the deal.

The transaction is conditional upon Mont Royal raising a minimum of $8 million and as much as $10m through the issue of ordinary fully paid shares to fund resource growth and advance the preliminary economic assessment.