The falling out between Bendigo Mining Ltd (ASX: BDG) and BCD Resources NL (ASX: BCO) resulted to an expected business split as the former confirmed on Thursday that the planned merger between the two companies has been ditched following the deterioration of a rift that started over a loan default.

Despite the scrapped corporate marriage, BCD assured Bendigo Mining that it would repay the disputed $5 million pre-completion loan, with the attending interest as covered in the terms of merger that the companies signed in July.

Bendigo Mining issued a warning directed to BCD Resources on Monday that the tie-up between them would be junked if the latter would not be able to meet the Wednesday deadline of their $5 million loan agreement.

Bendigo revealed that BCD forwarded some information during their merger negotiation process that the former deemed fell short of the requirements that embody the loan agreement, prompting the company board to initiate clarification inquiries directed to BCD Resources.

Yet as expected, the disagreement led to the fizzling out of the merger deal as Bendigo reiterated today that "the company board believes this negotiated outcome is in the best interests of the company and its shareholders."

In a statement made public on Wednesday, BCD Resources clarified that the loan agreement was honoured by the company a full payment was made to Bendigo on the same day through the use of a new funding facility.

BCD added that the new debt facility, which was provided by a publicly listed Australian mining firm, would also enable the company to sustain the normal and uninterrupted operations of its Tasmanian mining site.

Also, BCD Resources gave assurance that the market would be provided with the full details of the new facility, which will be released on Thursday.