Minmet, an Irish mineral resources company, is understood to be planning to acquire some oil assets from a UK-listed company called Gold Oil.
In addition, it is believed that the two companies will acquire newly-issued stock in each other, a move that is a prelude to them becoming strategic partners in a number of exploration projects.
Details of the transactions are due to be revealed early next week. The move is likely to be highly significant for Minmet, a company that has lacked momentum in recent times.
Under the plan, Minmet will pay about €1.5 million to Gold to acquire its interest in a number of "non-core" projects in south and central America.
The two groups will also swap shares. It is understood that Minmet, which is headed by Michael Nolan, will get about 23 million new Gold shares, giving it a 5 per cent stake in the UK company. Gold, meanwhile, will subscribe for more than 12 million new shares in its Irish counterpart. This will give Gold a near 25 per cent shareholding in Minmet.
Minmet is also set to make a number of changes at board level. It is understood that Mike Neville will step down as non-executive chairman and a number of appointments will be made.
The chief executive of Gold, Gary Moore (56), is expected to take a seat on the Minmet board. He has previously worked for Texaco and Shell and founded Sunningdale Oils (Ireland), which has gas production activities in Ireland.
Gold is listed on the Alternative Investment Market in London. It has a market capitalisation of £28 million and its shares closed at 7.25p yesterday. Its core area of operations are Peru and Colombia.
Minmet is listed on the IEX market in Dublin and has a quote on AIM. The company's share price closed at 19c.
