Australia’s Alkane Resources (ASX: ALK) will acquire Canada’s Mandalay Resources (TSX: MND) in an all-share deal valued at almost A$560 million (C$358 million), creating a combined diversified gold and antimony producer.
Alkane is to buy all issued and outstanding common shares of Mandalay under a court-approved plan of arrangement. Mandalay shareholders will receive 7.875 Alkane shares for each Mandalay share held. After the transaction, former Mandalay shareholders will own 55% of the combined company, with existing Alkane shareholders holding 45%.
The merged entity will operate under the Alkane Resources name, maintain its Australian Securities Exchange (ASX) listing, and seek a listing on the Toronto Stock Exchange. It will have an implied market capitalization of A$1.01 billion ($896.5 million) and expects to produce 160,000 gold-equivalent oz. in 2025, rising to more than 180,000 oz. in 2026 from three operating mines: Alkane’s Tomingley project and Mandalay’s Costerfield mine in Australia, along with the Björkdal mine in Sweden.
‘Merger of equals’
BMO Capital Markets analyst Brian Quast wrote in a note on Monday that the “merger of equals” deal and its total consideration of C$5.28 per MND common share, represents a 2% premium to the most recent trading day. It also represents a 6% discount compared with the 20-trading day volume-weighted average price.
The merged company is also expected to benefit from a primary ASX listing valuation re-rate driven by VanEck Junior Gold Miners ETF and potential inclusion on the ASX 300 index, Quast said.
The tie-up, unanimously approved by both companies’ boards, comes amid a wave of consolidation in the gold sector, driven by record bullion prices. Gold hit a record US$3,500.05 per oz. last week, up more than 25% this year to date on the back of geopolitical tensions and strong central bank demand.
Recent deals include Equinox Gold’s (TSX, NYSE-A: EQX) C$2.6 billion acquisition of Calibre Mining (TSX: CXB) in February. Spartan Delta (TSX: SDE) agreed to a A$2.4 billion takeover by Australia’s Ramelius Resources (ASX: RMS) less than a month later. South Africa’s Gold Fields (JSE, NYSE: GFI) made a A$3.3 billion bid for Gold Road Resources (ASX: GOR), though it was rejected.
Last week, Northern Star Resources (ASX: NST) completed an A$5 billion acquisition of De Grey Mining.
Nic Earner, Alkane’s current managing director, is to lead the merged company. The transaction is expected to close in the third quarter of 2025.
Be the first to comment on "Alkane to acquire Mandalay Resources in $358M deal"