LONDON, Feb. 3 -- European Nickel Plc (ENK.L: Quote) said it agreed to buy Rusina Mining (RMLA.L: Quote) (RML.AX: Quote)in a share deal worth about 18.1 million pounds ($28.8 million) as the company seeks to become a mid-tier nickel producer.
Under the deal, European Nickel would offer four new shares for every five Rusina shares. It plans to list the shares through ASX-listed CHESS Depositary Interests (CDIs) so that Rusina shareholders can trade them in Australia.
Rusina directors have unanimously recommended the offer which is subject to Australian court approval.
European Nickel said the deal is the logical outcome of a joint venture between the two companies at the Acoje nickel project in the Philippines.
"Acoje will be our next development project after Caldag and simplifying the corporate structure, along with bolstering our management team ahead of critical development and financing decisions is logical," said Simon Purkiss, managing director of European Nickel.
AIM-listed European Nickel also said on Tuesday it placed 172.4 million new shares to raise about $19.4 million before expenses.
It decided to carry out the placing because Chinese approval for a $20 million financing deal, signed in December 2008, has taken longer than originally indicated.
At 1521 GMT, shares in European Nickel were up 7.1 percent, while Rusina was up 2.3 percent.