Alkane and Mandalay to collaborate on gold-antimony production.

April 28, 2025 10:30 AM AEST | By Team Kalkine Media

Alkane and Mandalay to collaborate on gold-antimony production. — Image source: Shutterstock

Overview of the Companies and the Agreement

Alkane Resources Ltd, primarily listed on the Australian Securities Exchange (ASX:ALK), operates as a multi-commodity miner in Australia. The company’s flagship asset, the Tomingley gold operation in New South Wales, is recognized for its consistent production and exploration potential. On the other hand, Mandalay Resources Corporation, listed on the Toronto Stock Exchange (TSX:MND), brings a portfolio of significant assets such as the Costerfield antimony-gold mine in Victoria, Australia, and the Björkdal gold mine in Sweden.

The definitive arrangement agreement between these companies outlines plans for Alkane to acquire all issued and outstanding common shares of Mandalay. This acquisition is to be executed as per a court-approved plan of arrangement, resulting in a merged entity that will continue to trade under Alkane Resources on the ASX, with intentions to list on the TSX. The combined strategic assets from both companies present a significant shift aimed at enhancing stock value and operational efficiencies.

Strategic Goals of the Merger

Following the merger, Alkane Resources aims to achieve a consolidated gold and antimony output, with an expected production capacity of approximately 160,000 ounces in 2025. The integration of Alkane's Tomingley gold operation with Mandalay's high-value mines is considered a strategic enhancement of the production portfolio. By 2026, the combined production from these mines is estimated to reach over 180,000 ounces, driven by efficiencies gained from shared resources and expertise.

Nic Earner, Managing Director of Alkane, emphasized the strategic alignment of the merger, highlighting the complementary nature of the two companies' assets. The transaction is expected to bolster Alkane's scale and financial capabilities, positioning the merged entity advantageously for continuous growth and resilience in the competitive mining industry.

Market Implications and Future Prospects

The implied market capitalization of the newly formed entity stands at approximately A$1,013 million or C$898 million. Such a valuation underscores the market's recognition of the strategic benefits and potential for enhanced shareholder value. The merger opens avenues for Alkane and Mandalay to leverage long-term shareholder support to pursue further growth trajectories.

The merger also aims for enhanced stock performance through diversification and improved resource management across multiple geographies. The dual listing on the ASX and TSX is anticipated to widen the merged entity's investor base, providing greater liquidity and exposure in the global mining sector.

In a sector where strategic alliances can redefine market paradigms, the merger between Alkane Resources Ltd and Mandalay Resources Corporation represents a calculated approach to strengthen presence, enhance production capabilities, and achieve enhanced operational efficiency. As the industry observes, developments from this merger may set a precedent for future collaborations within the mining sector, fostering an environment of growth and innovation. Stakeholders and observers alike will be keenly watching the integration process and its impact on gold and antimony production globally.

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