Alkane Resources Ltd and Mandalay Resources Corporation (TSX: MND, OTCQB: MNDJF) have agreed to merge in a "merger of equals" transaction, forming a diversified gold and antimony producer operating across premier mining jurisdictions.
Retains ASX ticker
The combined entity, to continue as Alkane Resources, will retain its ASX listing and pursue a secondary listing on the Toronto Stock Exchange (TSX).
Alkane managing director Nic Earner will lead the combined company, supported by a board comprising nominees from both companies and chaired by mining veteran Andy Quinn.
"The transaction will take Alkane to a new level, bringing together two companies with complementary assets and a shared vision for growth,” Earner said.
“Mandalay’s two high-quality mines match the attributes of Tomingley: a proven history of consistent production, cash generation and exploration upside.
“The combination of assets, leadership, and supportive long-term shareholders enhances our scale and financial strength, and positions us well to continue to pursue additional growth opportunities.”
Under the terms of the agreement, Mandalay shareholders will receive 7.875 Alkane shares for each Mandalay share held.
Post-transaction, former Mandalay shareholders will own around 55% and existing Alkane shareholders some 45% of the merged entity, based on an implied market capitalisation of A$1,013 million (C$898 million).
Large gold-antimony producing platform
The merger is expected to create a platform capable of producing in the region of 160,000 gold-equivalent ounces in 2025, growing to more than 180,000 ounces in 2026.
Operations will be anchored by three producing mines: Alkane’s Tomingley gold mine in New South Wales, Australia, Mandalay’s Costerfield gold-antimony mine in Victoria, Australia and the Björkdal gold mine in Sweden.
A robust proforma balance sheet with A$188 million (C$167 million) in cash as at 31 March 2025 is expected to fuel further organic and inorganic growth.
The merger is positioned to improve trading liquidity, increase institutional investment and drive a valuation re-rate.
The combined company’s production growth will be underpinned by the ramp-up at Tomingley and ongoing exploration and development activities, including the Boda-Kaiser copper-gold project.
The boards of both Alkane and Mandalay have unanimously recommended the transaction, which remains subject to shareholder, regulatory and court approvals, with completion targeted for the third quarter of 2025.
Accelerating value creation
President and CEO of Mandalay Frazer Bourchier said: “The transaction presents a compelling opportunity for Mandalay shareholders to accelerate value creation through increased capital markets scale, liquidity and a growing diversified asset base.
“We are excited to have found a like-minded partner committed to the same principles.
“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.
“I am also pleased to have gained support of our major shareholders, as we believe the combined company will be extremely well positioned for a valuation re-rate in line with ASX-listed peers and for subsequent growth.”