11:54 AM EDT, 04/11/2025 (MT Newswires) -- Commerce Resources ( CMRZF ) on Friday struck a merger agreement under which Australia-listed Mont Royal Resources will acquire all of Commerce's shares and combine their respective businesses.

The deal will create a Quebec-focused critical minerals explorer and developer by combining Commerce's Ashram Rare Earths and Fluorspar Project and the Eldor Niobium exploration project with Mont Royal's Northern Lights Lithium Project.

The merger will result in a dual listing on the TSX Venture Exchange and the Australian Securities Exchange, enabling greater access to liquidity and funding for the Ashram project.

Under the agreement, Commerce shareholders will receive 2.3271 ordinary shares of Mont Royal for each Commerce share held. This represents an implied value of C$0.093 per Commerce share, an equity value for Commerce of C$17.2 million and an implied premium of 55% to Commerce's closing share price of C$0.06 on April 8.

Commerce shareholders will own about 85.3% of the outstanding Mont Royal shares and Mont Royal shareholders will own about 14.7%.

The deal is contingent upon Mont Royal raising up to A$10 million by issuing Mont Royal shares. Proceeds will be used to advance the preliminary economic assessment at the Ashram project and to advance the Eldor project and the exploration pipeline at the Northern Lights project.

In addition, Commerce plans to conduct a convertible note financing with Commerce and Mont Royal shareholders and other investors to raise up to C$2.2 million, to be used as interim funding to continue studies for the development of the Ashram project and for working capital.

The combined company's board will be composed of a new non-executive chairman Cameron Henry, appointed by Commerce; two directors from Commerce, Jeremy Robinson and Adam Ritchie; and one non-executive director, expected to be Ronnie Beevor, appointed by Mont Royal.

A new chief executive will be appointed prior to deal completion to replace interim Commerce CEO and President Jeremy Robinson.

The deal completion is subject to customary conditions for a transaction of this nature.

The company's shares were last seen up $0.005 to $0.075 on the TSX Venture Exchange.