Veteran Aussie entrepreneur Alan Burns is leading a £3 million reverse takeover of bombed-out Falkland Gold and Minerals (FGML).

Under the proposed deal, FGML will issue shares to acquire BPC, a Jersey-based company formed last year to look for oil offshore of the Bahamas by Burns, founder and former chairman of Hardman Resources and a director of Renewable Energy Holdings. Investment group RAB owns 79 per cent of FGML and 53 per cent of BPC and is backing the deal.

Floated on AIM at 40p four years ago, FGML made it clear in January that its quest for worthwhile mineral deposits in the Falkland Islands had been unsuccessful and it now trades at a mere 4p. BPC has is backing an offshore exploration programme over nearly four billion acres of the Bahamas’ maritime economic exclusion zone and says it has so far identified 22 leads large enough potentially to contain ‘commercially exploitable volumes of hydrocarbons’.

If shareholders approve the deal, the enlarged company will change its name to BPC Ltd. FGML, which had £3.6 million of assets, mostly bank deposits, at the end of June, is offering six of its shares for every one of BPCs, to put a value of nearly £3 million on the new company.

BPC, which points out the Bahamas’ favourable tax regime for exploration companies, says it will seek additional funds if its application for five additional offshore licences there succeeds. An AIM quote should make that fundraising easier even in today’s markets.

If the deal, which has been welcomed by FGML’s chairman Richard Linnell, goes through, Burns will become chairman and chief executive officer of the enlarged BPC, with a new board including his colleague Michael Proffitt, chief executive of Renewable Energy Holdings. Burns has a fair track record, having agreed the sale of Hardman to Tullow Oil last year for £650 million and, with key shareholder support already, this seems a reasonable outcome for shell-shocked FGML investors.

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Bahamas explorer in FGML reverse			08/08/2008