Cape Alumina and Metrocoal in posssible merger

Junior resources companies MetroCoal and Cape Alumina are expected to announce a deal today after both companies halted trading in their shares ahead of finalising a corporate merger. Cape Alumina has a market capitalisation of $13 million and Metrocoal is valued at $8m. "The trading halt is necessary as the company is in the final stages of the completion of a corporate merger," MetroCoal said in its statement. This was similar to the request from Cape Alumina, which last traded at 7c. Cape Alumina has bauxite deposits in Queensland and is assessing its $1.2 billion Pisolite Hills venture, which is located 50km northeast of Weipa, while MetroCoal is focused on thermal coal projects in the Surat-Moreton Basin in southeast Queensland. Cape Alumina was also on the shortlist of five entities invited to bid for the right to develop the Aurukun bauxite deposit on western Cape York, estimated to be worth up to $20bn. The company had said in its June quarterly report a detailed tender was due to be submitted to the Queensland government in September, but as of last week only Glencore and Australian Indigenous Resources, which represents Cape York's Aurukun community, had submitted bids after the other groups withdrew. MetroCoal, whose share price last traded at 3c, was issued a speeding ticket by the Australian Securities & Investments Commission last month after its stock jumped from 4c a share to 6c. The company said at the time that it had been in discussions with several potential joint venture partners and also was considering investments in other "potential opportunities", which it said were "at an early stage of discussions".