The all-share merger of Mandalay Resources (TSX: MND) and Alkane Resources (ASX: ALK) looks set to mint a new billion-dollar gold-antimony miner as sector consolidation continues.
Both companies’ boards agreed to merge last month in an all-share deal that will create a mid-tier miner with a pro forma market capitalization of A$1.01 billion (C$898 million). Mandalay shareholders will hold 55% of the new company and Alkane shareholders 45%. Dual listings on the ASX and TSX will remain after the deal closes in the third quarter.
“The timing of this is ideal, somewhat fortuitous, with rising gold prices and antimony,” CEO Frazer Bourchier tells The Northern Miner. “We have created so many more options and flexibility with this combined entity,” Bourchier said.
The new company will start with a clean balance sheet and combined cash of A$188 million as of March 31. It will also have a two-year hedge program at 17%. This setup could provide the group with over US$100 million in net cash, which can be used for exploration, mill expansions, and more acquisitions, Bourchier says.
The merger is to boost annual gold-equivalent output to about 160,000 oz. this year and 180,000 oz. by 2026 from the Tomingley, Costerfield and Björkdal mines.
Management is aiming to join the GDXJ and ASX 300 indices – a move that Bourchier says would attract both passive and institutional investors.
Watch below the full interview with host Devan Murugan. Joint venture videos are paid-for content in partnership with The Northern Miner.
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