Two leading global investors in gold equities, Blackrock Investment Management and Baker Steel Managed Funds have committed to subscribe to a total of $50 million new shares in a new company arising from the merger of Catalpa Resources Limited (ASX: CAH) and Conquest Mining Limited (ASX: CQT).

The said new investment to be made by Blackrock and Baker Steel will be part of the so-called pro-rata renounceable entitlement plan to raise approximately A$150 million to ensure that the combined group is suitably capitalised to realise the full development and exploration potential of its assets and achieve its growth ambitions, an emailed statement said.

On 15 July, Catalpa Resources and Conquest Mining announced an all scrip merger of equals and concurrent acquisition of Newcrest's Cracow and Mt Rawdon gold mines to create a leading growth-focused Australian gold company.

The renounceable entitlement issue will take place shortly after the transaction is implemented so that shareholders of both Catalpa and Conquest can participate. At the request of Catalpa and Conquest, Newcrest has agreed not to take up its entitlement (approximately $57million) to allow the merged entity to broaden its investor base.

Investments from Blackrock and Baker Steel were affirmed after an investor roadshow in Europe conducted by Conquest executive chairman Mr Jake Klein and Catalpa managing director Mr Bruce McFadzean.

"Blackrock and Baker Steel have each agreed to subscribe at the price determined through the institutional bookbuild of renounced entitlements. Their commitment is subject to the entitlement offer being underwritten and to shares being issued under the offer before 31 December 2011. In return, it has been agreed that these institutions will receive a firm allocation up to the dollar amount they have committed," the statement said.

Jake Klein, Executive Chairman of Conquest and proposed Executive Chairman of the merged group said:

"Bruce and I have enjoyed widespread support for the merger since we announced the deal but a number of institutional investors are waiting to review the Scheme documentation and see greater certainty that the deal will be implemented before investing. That being the case, it is especially pleasing to have this early support and endorsement of the deal from global resources investors of the calibre of Blackrock and Baker Steel."

Bruce McFadzean, Managing Director of Catalpa said:

"Like Conquest, we have also had very positive feedback from shareholders and investors alike about the industrial logic of the deal and the potential for the combined group to deliver long term sustainable growth in value. This commitment of investment represents a significant vote of confidence as we progress with this transaction and it is great to see two of the world's most respected investors in gold equities being prepared to endorse the merits of this deal at such an early stage."

The Catalpa Explanatory Memorandum and Conquest Scheme Booklet are expected to be mailed to respective shareholders in late August/early September 2011, with shareholder meetings expected to be held in early October 2011. The Scheme is expected to be implemented in October 2011 and the proposed equity raising will be launched shortly thereafter.