Alkane goes global: diversifying gold and antimony production
Perth based Alkane Resources (ASX: ALK) are set to acquire Canada based Mandalay Resources in a proposed “merger of equals” to create a diversified gold and antimony producer.
The acquisition proposes that Alkane is to buy all issued and outstanding shares of Mandalay under a court-approved plan of arrangement in an all-share transaction. Mandalay shareholders will receive 7.875 Alkane common shares per each Mandalay common share held.
The merged entity will operate under the name Alkane Resources and following the transaction, Mandalay shareholders will own 55% of the merged company and Alkane shareholders will hold 45%.
The company will maintain its ASX listing as its primary and seek a Toronto Stock Exchange (TSX) secondary listing with an implied market capitalization of more than $1b.
With a combined forecast production of 180,000oz in 2026 the company will operate across three mines, Alkane’s Tomingley gold mine in Australia, Mandalay’s Costerfield underground gold and antimony mine in Australia and its Björkdal underground gold mine in Sweden.
The combined company is expected to improve capital market positioning and create a powerful platform with a shared vision for continued growth.
Alkane’s managing director Nic Earner commented that the transaction will elevate the companies to a new level.
“Mandalay’s two high-quality mines match the attributes of Tomingley, a proven history of consistent production, cash generation and exploration upside,” he said.
“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.”
Mandalay’s president and chief executive Frazer Bourchier said that the transaction presents a compelling opportunity for shareholders to accelerate value creation.
“We are excited to have found a like-minded partner committed to the same principles,” he said.
“The transaction aligns with our vision to create a mid-tire gold and antimony producer with mines in premier operating jurisdictions and with our strategy for continued growth.”
The diversified production across three mines in premier jurisdictions proposes reduced overall operation and financial risk for shareholders.