Creating a mid-tier gold and antimony producer
Alkane Resources is set to merge with Mandalay Resources to create an emerging gold and antimony producer worth approximately $1 billion.
Under a definitive arrangement agreement, Alkane will acquire all the issued and outstanding common shares of Mandalay following a court-approved plan of arrangement under the Business Corporations Act (British Columbia).
Mandalay shareholders will receive 7.875 ordinary shares of Alkane for each ordinary share of Mandalay held prior to the effective time of the transaction.
Once the merger is complete, former Mandalay shareholders and existing Alkane shareholders will own approximately 55 per cent and 45 per cent of the outstanding ordinary shares in the combined company, respectively, on an undiluted basis.
Alkane is currently operating the Tomingley gold operation located approximately 50km southwest of Dubbo in New South Wales. Tomingley currently comprises the Caloma One, Caloma Two, Wyoming One and Wyoming Three deposits.
Open pit mining at Tomingley ceased in 2023, with the operation fully transitioning to underground mining at Wyoming One, Caloma One and Caloma Two.
The Tomingley extension project is now extending the mine’s operations to at least 2032 by carrying out ongoing underground expansion and pre-mine grade control drilling.
Mandalay currently owns two operating assets: the Costerfield gold-antimony operation in Victoria and the Björkdal gold operation in Skellefteå, Sweden.
By merging Alkane and Mandalay, a diversified Australian-centric gold and antimony producer will be created.
“The transaction will take Alkane to a new level, bringing together two companies with complementary assets and a shared vision for growth,” Alkane managing director Nic 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.”
The proposed merger has been unanimously approved by the Alkane and Mandalay boards, with directors from both companies recommending that shareholders vote in favour of the transaction.
If successful, the merged company will have a combined forecasted production of approximately 160,000 gold-equivalent ounces in 2025, which is expected to increase to over approximately 180,000 gold-equivalent ounces in 2026.
It will also invest in growing Tomingley, Costerfield and Björkdal, as well as at Alkane’s Boda–Kaiser copper-gold project, through exploration.
“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,” Mandalay president and chief executive officer Frazer Bourchier said.
“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.”
Once the transaction is complete, the merged entity will operate as ‘Alkane Resources’ on the ASX and the Toronto Stock Exchange (TSX) exchange, the latter of which Mandalay is currently trading.
The company’s leadership team will comprise:
- Bourchier from Mandalay
- Brad Mills from Mandalay
- Dominic Duffy from Mandalay
- Earner from Alkane, who will also lead management
- Ian Gandel from Alkane
- Andy Quinn, who will be the merged company’s new independent chair.
The merger is expected to be finalised by the third quarter of 2025.
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