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Alkane Resources to Acquire Mandalay Resources in A$559.1 Million Gold Mining Deal
Australia’s Alkane Resources (ALK) is set to acquire Canada’s Mandalay Resources (MND) in an all-stock transaction valued at A$559.1 million ($357.8 million). This strategic move, announced on Monday, will create a combined and more diversified gold and antimony producer, enhancing their presence in the global gold sector.
The resulting entity will possess an approximate market capitalization of A$1.01 billion and anticipates a gold-equivalent production of 160,000 ounces in 2025, with projections exceeding 180,000 ounces in 2026. This output will stem from three well-established mines: Alkane’s Tomingley, Mandalay’s Costerfield mine in Australia, and the Björkdal mine in Sweden.
Transaction Details
According to the terms of the agreement, Mandalay shareholders will receive 7.875 Alkane shares for each Mandalay share they currently hold. This arrangement will grant Mandalay’s stakeholders approximately 55% ownership of the newly formed company.
Trend of Consolidation in the Gold Sector
This merger aligns with an ongoing trend of consolidation within the worldwide gold sector. Gold mining companies are increasingly capitalizing on rising bullion values. Last week, gold reached a record high of $3,500.05 per ounce, fueled by escalating geopolitical instability and robust demand from central banks, marking an increase of over 25%.
Recent activity in the gold mining industry includes Northern Star Resources (NST) completing its A$5 billion acquisition of De Grey Mining (DEG) last week.
Earlier in March, Spartan Delta (SDE) of Australia agreed to a A$2.4 billion takeover by Ramelius Resources (RMS), while South Africa’s Gold Fields (GFI) made a A$3.3 billion bid for Gold Road Resources (GOR), which was subsequently rejected.
Looking Ahead
The Alkane-Mandalay transaction, which has received unanimous approval from both boards, is expected to finalize in the third quarter of 2025. Alkane intends to pursue a TSX listing for the combined entity.
Leadership and Potential Benefits
The merged organization, headquartered in Australia, will be led by the current Managing Director of Alkane, Nic Earner. The company anticipates benefits from potential inclusion in the ASX 300 index.
($1 = 1.5623 Australian dollars)