Strickland Metals (ASX:STK) said it plans to distribute 80% of the shareholding it will acquire in Gateway Mining (ASX:GML) for the sale of the Yandal project in Western Australia to Strickland shareholders by way of a combination of an in-specie capital return and an in-specie dividend, according to a Tuesday Australian bourse filing.

On the satisfaction of the conditions precedent and completion of the deal, Strickland will receive 1.5 billion convertible preference shares in Gateway, worth AU$45 million. These will automatically convert into fully paid ordinary shares in Gateway on a one-for-one basis.

Strickland shareholders will receive around 53 Gateway shares for every 100 Strickland shares held, subject to approval.

Eight drill rigs are on site at the Rogozna gold-base metals project in Serbia, with four rigs drilling at the Gradina deposit, two rigs at the Shanac deposit, and two rigs focused on exploration at the Kotlovi and Jezerska Reka prospect.

Its shares fell 6% in recent trading on Tuesday.