PERTH - Both Focus Minerals Ltd (ASX: FML) and Crescent Gold Ltd (ASX: CRE) announced today they would advance plans for a merged company to mine gold in both Focus' Coolgardie region projects and Crescent's operations in the Laverton district. Focus is offering one share for every 1.18 Crescent shares, representing a 30.5% premium to Crescent's closing price last Friday of A5 cents a share. In a pre-bid agreement Focus has already gained a 19.9% stake in Crescent from its major shareholder Deutsche Bank Group. Unless there is a variation the bid for Crescent will close on August 8, with Focus stipulating a minimum 90% acceptance from Crescent shareholders. As a prelude to this deal Focus provided a A$3 million (UDS$3.16 million) secured loan in May and, in mid June, gave focus a A$10 million (US$10.55 million) working capital facility. Focus said the combined group will have a JORC resource inventory of 4.3 M oz of gold, with the Focus open cut and underground operations in and around Coolgardie working largely on mid to high grade ore, while Crescent has a package of open cuts grading around 2 grams/tonne. One of the forward challenges is that both companies are swimming in a sea of shares. Intierra Resource Intelligence shows today that Focus has 3.44 billion issued shares -- for a market capitalisation of about A$265 million (US$279 million) -- and Crescent has almost 1.078 billion shares with a share price struggling to reach A5c. In comparison the dominant Australian owned gold miner Newcrest Mining Ltd with its large Australian, Indonesian and Papua New Guinean mines has 765.4 million in scrip - and a market capitalisation of more than A$27.9 billion (US$29.4 billion). While Focus has undertaken significant capital raisings in the past year it has ploughed the money into successful capital developments, whereas Crescent has had its fair share of heartburn with copper problems in some of its ore going through Barrack Mines' Granny Smith mill, and also severe recent flooding in the north eastern goldfields. Focus chief executive Campbell Baird, said: "The merger of Crescent Gold and Focus Minerals provides a unique opportunity for both businesses to fast track their growth aspirations making Focus one of Australia's Top 5 gold producers. "Once this transaction is complete this creates a strong platform for both companies' shareholders to benefit from a substantial value uplift from a significant increase in combined production, a doubling of gold resources, and the ability to step up exploration within Crescent's extensive landholding", he added.

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