Alkane and Mandalay to Merge, Expanding Gold and Antimony Footprint

Highlights:

• Alkane Resources and Mandalay Resources announce a merger to form a diversified gold and antimony producer.

• The merged entity will hold a robust cash balance, supporting organic and inorganic growth initiatives.

• Former Mandalay shareholders will hold the majority of shares in the combined company.

In a significant development within the mining sector, Alkane Resources (ASX:ALK) and Mandalay Resources Corporation (ASX:MND) have revealed plans to merge. This strategic union will create a more diversified company with a focus on gold and antimony production, consolidating assets across Australia and Sweden. The merger is set to enhance both companies' capabilities, bringing together a wealth of complementary assets.

Transaction Details and Share Distribution

Under the terms of the merger, Mandalay shareholders will receive a set number of ordinary shares in Alkane for each Mandalay share they currently hold. Upon finalizing the deal, the ownership of the merged company will be split, with Mandalay shareholders controlling the majority of the outstanding shares.

Advisory Teams for the Transaction

Both companies have enlisted several advisors to facilitate the merger process. Mandalay has engaged Haywood Securities, Goodmans, Clayton Utz, and Gencap Mining Advisory. Alkane, on the other hand, has appointed Bell Potter Securities, Euroz Hartleys, HopgoodGanim, and Bennett Jones to guide them through the transaction.

Market Capitalization and Growth Strategy

The merger will result in a combined market capitalization estimated at over one billion dollars. This merger also aligns with Alkane’s strategy to continue growing and expanding its exploration activities. The combined company will focus on further exploration at its operating mines in both Australia and Sweden, as well as explore additional growth opportunities beyond its current projects.

Assets and Mining Operations

Alkane Resources currently owns several mining assets in New South Wales, including the Tomingley Gold and Northern Molong Porphyry projects, which are recognized for their valuable mineral resources. These projects are complemented by other exploration prospects in gold, copper, nickel, zinc, and silver.

Mandalay Resources brings with it two key assets: the Costerfield Gold-Antimony Mine in Australia and the Björkdal Gold Mine in Sweden. These properties are integral to the combined entity’s strategy, offering a diversified operational base with exposure to different mining jurisdictions.

Leadership Comments on the Merger

Both companies' leadership have expressed optimism about the merger. Alkane’s Managing Director emphasized that the transaction would elevate the company to a new level, highlighting how the combined assets of the two companies would create a more robust and sustainable operation. He noted the proven track record of Mandalay’s mines in producing consistent cash flows and generating value.

Mandalay’s CEO echoed similar sentiments, pointing out that the merger would help form a new mid-tier producer of gold and antimony. The two companies share a commitment to growth, with both believing in the long-term value creation that the merger would bring.

Looking Ahead for the Combined Entity

Upon completion of the merger, the combined entity will be well-positioned to pursue both organic and inorganic growth. Exploration at the existing mines will continue, with the possibility of new acquisitions and developments to further expand the company’s portfolio. This strategic move reflects the companies’ shared vision to capitalize on their mining assets and expand into high-quality jurisdictions.

The combination of Alkane Resources and Mandalay Resources creates a more diversified entity with a broad portfolio across multiple jurisdictions. The focus will remain on enhancing operational efficiency and pursuing growth avenues that complement the company’s existing assets and capabilities.