Astral Resources NL and Maximus Resources Ltd are poised to combine into a Western Australian gold developer with a gold inventory of about 1.8 million ounces.
Astral is set to acquire Maximus in a unanimously recommended off-market takeover offer with one Astral share offered for every two Maximus shares.
The offer values Maximus at about $31 million with a share price of $0.073, representing a 61% premium to MXR’s last undisturbed closing price of $0.045 on December 24, 2024.
Powerful strategic synergies
“The combination with Maximus provides a compelling opportunity to generate value for both sets of shareholders by creating a company with increased size, scale and market relevance, all attributes which enhance re-rating potential,” Astral Resources managing director Marc Ducler said.
“The merged entity will have combined (and proximal) mineral resources of approximately 1.8 million ounces of gold, regional gold targets underpinning significant exploration potential and the financial capacity to support accelerated progression.
“We look forward to welcoming Maximus shareholders to Astral’s register and for them to benefit from further progress at both Mandilla and the broader combined asset portfolio in 2025 and beyond.”
The directors of Maximus have unanimously recommended that its shareholders accept the offer and have expressed their intention to accept the offer for their own shares, which collectively amount to 5.1 million or 1.2% of shares on issue.
Merger to increase scale and flexibility
“We are pleased that, in addition to realising an attractive premium, the transaction provides Maximus shareholders with the opportunity to become shareholders of a company with significantly increased scale, balance sheet and team capable of leveraging the potential of the Mandilla project with the benefit Maximus’ neighbouring resources and exciting regional exploration targets,” Maximus managing director Tim Wither said.
“By accepting the offer, Maximus shareholders will have a material interest in the upside potential associated with the combined portfolio.
“Maximus’ board believes that this transaction is in the best interests of Maximus to unlock the value from the company’s Spargoville tenements and unanimously recommends it to shareholders, in the absence of a superior proposal.”
The two companies believe the merger will offer myriad benefits for MXR shareholders, including:
- Premium price – offer represents a 61% premium to MXR’s last undisturbed trading price.
- High liquidity of shares – $32 million Astral shares traded in three months prior to announcement, compared to $2.3 million in Maximus.
- Exposure to portfolio – Astral holds an advanced portfolio of gold assets, including the flagship Mandilla Project with a 1.27-million-ounce gold resource, one of the largest undeveloped single-pit deposits in Australia.
- Development flexibility – increased flexibility with adjacent tenements, mining leases and tenure footprint, allowing for versatile future development of gold resources and potential future ore feed from regional targets
- Financial strength – Astral says it has a strong balance sheet, with $25.3 million in cash as of December 31 last year and no debt. The company also has a strong institutional investor base, raising $25 million in a capital raise in September 2024.
- Market relevance – Astral expects to have a market capitalisation of about $200 million post-merger, with existing broker coverage and a 1.8-million-ounce mineral resource with exploration upside.