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Highlights:
Alkane Resources announces a merger with Mandalay Resources via a scrip-based transaction.
The merged company will own three cash-generating mines across Australia and Sweden.
Projected gold equivalent production set to increase over the next two years.
Gold miner Alkane Resources (ASX:ALK) has revealed plans to merge with Canadian-based Mandalay Resources. This move comes amid increasing bullion prices and reflects a growing trend among mining companies to build scale through strategic consolidation. The combined entity will have a secondary listing on the Toronto stock exchange, strengthening its presence across multiple regions.
Structure and Terms of the Transaction
Under the terms outlined, Perth-headquartered Alkane Resources will acquire Mandalay Resources through a scrip-based arrangement. Shareholders of Mandalay are set to receive a specified number of Alkane shares for each Mandalay share held. Upon completion of the merger, Alkane shareholders are expected to retain a minority stake in the new company, which will feature an expanded market capitalisation.
Alkane shares recently closed at a higher value, highlighting recent momentum within the gold mining sector. The combined group’s secondary listing is aimed at increasing visibility and access to North American capital markets.
Key Assets of the Merged Entity
The merged company will control a diversified portfolio of cash-generating mining operations. Key assets include Alkane’s Tomingley mine in New South Wales and Mandalay’s Costerfield mine located in Victoria. Additionally, Mandalay brings the Björkdal mine in Sweden to the portfolio, broadening the group's geographical footprint.
Development projects such as Alkane’s Boda-Kaiser copper-gold project in New South Wales and Mandalay’s True Blue project in Victoria will also form part of the combined company’s pipeline. These assets are positioned to support growth ambitions and production expansion over the coming years.
Production and Financial Position
Following the merger, the combined entity is projected to achieve increased gold equivalent production across the next two years. Production volumes are expected to grow as existing assets are further optimised and development projects come online.
The proforma balance sheet of the merged company indicates a strong financial position, supported by a significant cash balance recorded as at the end of March. This financial foundation provides capacity to support ongoing operations, exploration, and expansion activities across all operating regions.
