Duke has been working on the deal for almost six months and will need to recapitalise and re-comply with the ASX listing rules, but said the merger would put it on an accelerated path to production.
The company listed on the ASX by raising $8 million at 20c in 2020, with big plans to explore Queensland for copper, primarily at its Bundarra project, but its share price has dwindled over the past two years as the geology proved to be extremely complex.
It has struck a deal with Barolo Investment Partners-backed TNC to pick up a sprawling tenement position in Queensland's Mt Isa region with resources of 27 million tonnes grading 1.12% for 307,210t copper and 9.2Mt at 0.23% for 21,200t cobalt.
Shareholders will need to approve the deal, and Duke needs to raise complete a 2.3:1 share consolidation and raise at least $35 million at 25c per share to close the deal.
An underwriter is being sought.
TNC has agreements to pick up assets from CopperChem and Perilya.
It brings the historical Great Australia Mine at Cloncurry, first discovered by Ernest Henry in 1867, and oxide and sulphide processing facilities that have been on care and maintenance since 2017.
Tombola Gold has recently refurbished the gold circuit at GAM and produced its first gold earlier this month under a short-term rental agreement.
TNC's portfolio is largely on approved mining licences, and covers some 552sq.km, but has seen limited exploration for a decade.
The new Duke aims to restart copper-gold production at GAM and then develop the Vero deposit within the Mt Oxide copper-cobalt project that TNC is buying from Perilya up to $45 million.
TNC has also agreed to pick up 18 licences from privately-run CopperChem for the issue of 16 million shares and up to $6 million in cash payments.
There are historical resources at the advanced Wallace North and Salebury projects that are being updated and around a dozen exploration prospects.
The transaction requires 247 million post-consolidation Duke shares being issued to TNC shareholders, which will see Duke shareholders own just 15% of the expanded company.
Founding directors Philip Condon and Toko Kapea will leave, making way for TNC's Marty Costello and Tim Dudley.
TNC has secured commitments for a $10 million raising expected to close within days with backing from Tembo Capital, which is likely to own around 27% in Duke once all the deals are closed.
Duke will be liable for $3 million in deferred payments stemming from TNC's purchase of assets from Round Oak Minerals (now owned by Aeris Resources) due once production resumes, while Perilya will be owed $15 million within two years.
Duke hopes to be trading again in May with a $112 million market capitalisation.
The company was worth just $5 million based on its last traded price of 5.3c in October.
