Alkane Resources Limited (ASX: ALK) and Mandalay Resources Corporation (TSX: MND, OTCQB: MNDJF) have announced the completion of a “merger of equals” transaction. Alkane will acquire all outstanding shares of Mandalay, forming a diversified gold and antimony producer. The merged company will continue to operate under the Alkane Resources name, listed on both the ASX and the TSX.
Key Transaction Highlights
The merger deal grants Mandalay shareholders 7.875 Alkane shares for each share of Mandalay they own. Upon completion, Alkane shareholders will hold 45% of the combined company, while Mandalay shareholders will own 55%. The combined company’s estimated value is A$1,013 million (C$898 million).
Nic Earner, Alkane’s Managing Director, will lead the company. The merger aims to strengthen the financial and operational standing of the new entity, which will focus on production expansion and growth opportunities.
Strategic Reasons Behind the Merger
The newly formed company will manage three operational mines: Alkane’s Tomingley gold mine (Australia), Mandalay’s Costerfield gold/antimony mine (Australia), and the Björkdal gold mine (Sweden). The company expects to produce about 160,000 gold-equivalent ounces in 2025, with growth to over 180,000 ounces by 2026. The anticipated reduction in all-in sustaining costs (AISC) will enhance profit margins, from A$2,750 per ounce in 2025 to A$2,160 per ounce in 2026.
Capital Market Position and Growth Prospects
This merger positions the combined company for significant capital market growth. With a larger scale, the company expects improved liquidity and an enhanced market valuation. The company has cash reserves of A$188 million and plans to invest in exploration, including the Boda-Kaiser copper-gold project.
Focus on Future Growth and Leadership
The company will pursue both organic and inorganic growth. New leadership includes three Mandalay nominees and two Alkane nominees on the Board. Andy Quinn, an independent Chair, will bring additional governance expertise to the team.
Shareholder Benefits
The merger offers diversified production, improved liquidity, and stronger market positioning. Alkane shareholders will benefit from exposure to Mandalay’s strategic antimony production, while Mandalay’s shareholders will gain from the gold production of Tomingley and the growth potential of Boda-Kaiser.
Approval and Next Steps
The merger is subject to approval from both Mandalay and Alkane shareholders, as well as regulatory clearances. It is expected to close in Q3 2025. A termination fee of A$17 million will apply under certain conditions, ensuring both parties remain committed to completing the deal.
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