Vulcan, Universal to merge

Cash-rich Vulcan Resources and Universal Resources have announced a friendly merger, bringing together copper projects in Finland and Queensland into the combined group.

The company's said the merged group will have a strong cash position given Vulcan's cash on hand of $28.4 million.

Under the proposed merge, Vulcan shareholders will receive 6.85 Universal shares for every share they held.

Both entities have entered into a non-binding term sheet and have agreed to deal exclusively with each other for the next three weeks.

Both companies then intend to enter into a merger implementation agreement by September 21.

"The companies have agreed that Universal will assess its capital requirements during the period of the merger and will advise the market should a decision be made to raise additional funds," both companies said in a statement.

Shares in Universal dropped 0.5 cents to 1.9c while shares in Vulcan were up 2.5c to 13.5c at 11:08 AEST.