Alkane Resources and Mandalay Resources are intending a “merger of equals” to create a combined company that will continue under the name “Alkane Resources”.
The transaction will create a diversified Australian-centric gold and antimony producer with a portfolio of three operating mines and a strong balance sheet.
Alkane’s established Tomingley gold mine (Australia), currently ramping up after a major capital expansion, will complement the well-established and stable production from Mandalay’s Costerfield underground gold/antimony mine (Australia) and the Björkdal underground gold mine (Sweden).
Benefits for Alkane shareholders include:
- Diversified production from three mines in premier jurisdictions reduces overall operational and financial risk.
- Larger equity free-float and greater trading liquidity driven by anticipated increase in institutional and passive index investment.
- Valuation expected to re-rate to higher ASX-listed gold mining company multiples.
- Expected to benefit from exposure to strategic antimony production from Costerfield and combined company’s strengthened balance sheet.