Australian mining companies Perilya Ltd. and CBH Resources Ltd. will merge in an all-stock deal that will put the combined group among the world’s top 10 zinc and lead producers, the companies said in a statement Wednesday.

Both companies operate lead and zinc mines in Australia’s Broken Hill mining district, as well as other national projects.

Analysts told Dow Jones Newswires that the merger will create more operational efficiency, producing some 220,000 metric tons of zinc and nearly 72,000 tons of lead with a combined market capitalization of 491 million Australian dollars ($450 million).

That would make the combined group the world’s ninth largest zinc producer and seventh largest lead producer.

Under the deal, CBH shareholders will get one Perilya share for every three CBH shares they own, one Perilya option for every 20 CBH shares, and one Kimberley Metals share for every 9.2 CBH shares, the two companies said in a joint statement.

CBH Chief Executive Stephen Dennis will be managing director, while Perilya Chairman Patrick O’Connor will take on the same role in the combined group.

Ore from CBH’s operations will be processed at Perilya’s nearby concentrator, which will avoid the cost of building a new plant. For Perilya, increased capacity utilization will lower the cost of operating its existing concentrator, raising the current throughput by 1 million tons to 2.8 million tons per year.

The merger will also combine a host of base metal projects in varying stages of development with a resource base in zinc, lead and copper, as well as gold.

Perilya shareholders will own 41 percent and CBH holders 59 percent of the merged group, and the bid represents a 27 percent premium on CBH’s March 19 share price.

The merger proposal has been unanimously accepted by the CBH board.

Perilya said it expected proceedings to be completed by late July this year.

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