PERTH: Alkane Resources Limited (ASX: ALK) and Mandalay Resources Corporation (TSX: MND) have agreed to merge in a deal that will create a mid-tier gold and antimony producer with operations in Australia and Sweden. The all-stock transaction, described as a “merger of equals,” is expected to close in the third quarter of 2025, pending shareholder and regulatory approvals.
Under the terms of the agreement, Mandalay shareholders will receive 7.875 Alkane shares for each Mandalay share held. Upon completion, former Mandalay shareholders will own approximately 55% of the combined company, with Alkane shareholders holding the remaining 45%. The merged entity, which will retain the Alkane Resources name, will be headquartered in Perth and led by Alkane Managing Director Nic Earner.
The combined company will operate three mines: Alkane’s Tomingley gold mine in Australia, Mandalay’s Costerfield gold-antimony mine in Australia, and the Björkdal gold mine in Sweden. The merger is projected to produce approximately 160,000 gold-equivalent ounces in 2025, growing to over 180,000 ounces in 2026. The pro forma cash balance of the new entity stands at A$188 million (US$120 million) as of March 31, 2025.
Strategic Benefits
– Enhanced scale and liquidity: The merger aims to attract institutional investors and improve valuation multiples.
– Diversified production: Operations in stable mining jurisdictions reduce operational risk.
– Growth potential: The combined company plans to invest in exploration and development, including Alkane’s Boda-Kaiser copper-gold project.
Both companies’ boards have unanimously approved the deal, with key shareholders, including Mandalay’s CE Mining and GMT Capital (holding 45% of shares), agreeing to vote in favor.
The transaction implies a 2% premium to Mandalay’s recent share price but a 6% discount based on the 20-day average. The combined market capitalization is estimated at A$1.01 billion (US$648 million).
Mandalay CEO Frazer Bourchier praised the merger as a catalyst for value creation. Alkane’s Nic Earner emphasized the alignment of both companies’ growth strategies. Financial advisors include Haywood Securities for Mandalay and Bell Potter Securities for Alkane.
Shareholder votes are expected by mid-2025, with regulatory approvals required in Australia and Sweden. A conference call to discuss the merger will be held April 28 at 9:30 a.m. Sydney time.