Alkane Resources (ASX:ALK) and Mandalay Resources Corporation (TSX:MND) have agreed to combine in a merger to create a diversified gold and antimony producer.
The pair say the merged company will have a robust balance sheet with a pro-forma cash balance of $188 million as at 31 March 2025 to pursue organic and inorganic growth.
Under the transaction, Mandalay shareholders will receive 7.875 ordinary shares of Alkane for each share of Mandalay held immediately prior to the effective time of the transaction.
Upon completion, former Mandalay shareholders and existing Alkane shareholders will own 55% and 45%, respectively, of the outstanding shares of the combined company on a diluted basis.
Mandalay has engaged Haywood Securities as exclusive financial advisor, Goodmans as Canadian legal advisor, Clayton Utz as Australian legal advisor, and Gencap Mining Advisory.
Alkane engaged Bell Potter Securities and Euroz Hartleys as joint financial advisors, HopgoodGanim as Australian legal advisor and Bennett Jones as Canadian advisor to the transaction.
The implied market capitalisation of the merged company is forecast to be $1.013 billion.
The company plans to continue to invest in exploration at all three of its producing mines in Australia and Sweden, as well as pursue other growth opportunities in addition to the Boda-Kaiser copper-gold project, which adds future production potential.
Alkane Managing Director Nic Earner says the transaction will take the company to a new level, bringing together two companies with complementary assets.
“Mandalay’s two high-quality mines match the attributes of Tomingley: a proven history of consistent production, cash generation and exploration upside,” Earner says.
Meanwhile, Mandalay CEO Frazer Bourchier says the transaction presents a compelling opportunity for shareholders.
“We are excited to have found a like-minded partner committed to the same principles,” Bourchier says.
“The transaction aligns with our vision to create a mid-tier gold and antimony producer with mines in premier operating jurisdictions and with our strategy for continued growth.”
Alkane Resources owns the Tomingley Gold and Northern Molong Porphyry projects, as well as other exploration prospects considered prospective for gold, copper, nickel, zinc and silver in New South Wales.
Mandalay Resources owns the Costerfield Gold-Antimony Mine in Australia, alongside the Björkdal Gold Mine in Sweden.
Write to Aaliyah Rogan at Mining.com.au
Images: Alkane Resources
