Alkane and Mandalay Combine to Create Growing Gold and Antimony Producer

Core Viewpoint - Alkane Resources Limited and Mandalay Resources Corporation have announced a "merger of equals" transaction, where Alkane will acquire all outstanding shares of Mandalay, creating a combined company that will operate under the name "Alkane Resources" and remain listed on the ASX while seeking a listing on the TSX [1][2]. Transaction Details - Mandalay shareholders will receive 7.875 ordinary shares of Alkane for each share of Mandalay held prior to the effective time of the transaction [2][12]. - The combined company will have an estimated market capitalization of A$1,013 million (C$898 million) [2][10]. - The transaction is subject to approval by shareholders of both companies and regulatory approvals, with an expected closing in Q3 2025 [13][16]. Strategic Rationale - The merger will create a diversified gold and antimony producer with three operating mines in premier mining jurisdictions [3][5]. - Projected gold equivalent production is approximately 160,000 ounces in 2025, increasing to over 180,000 ounces in 2026 [5][6]. - The combined company will have a robust pro forma balance sheet with A$188 million (C$167 million) in cash as of March 31, 2025, to support growth initiatives [5][6]. Management and Leadership - The executive team will be led by Nic Earner from Alkane, with key Mandalay executives joining to ensure operational continuity [2][11]. - The Board of Directors will include nominees from both companies, ensuring a balanced representation [6][21]. Benefits for Shareholders - Mandalay shareholders are expected to benefit from the production of the Tomingley gold mine and the growth potential of the Boda-Kaiser copper-gold project [15]. - Alkane shareholders will gain exposure to strategic antimony production from Costerfield and the strengthened balance sheet of the combined entity [15]. Market Metrics - The transaction implies a 2% premium to Mandalay's share price based on the exchange ratio, while a 20-day volume-weighted average price indicates a 6% discount [10]. - The merger is anticipated to enhance trading liquidity and increase the equity free-float, potentially leading to a valuation re-rate in line with ASX-listed peers [15].