Merger Risks and Rewards: Can Alkane Deliver on Growth After Mandalay Deal?
Alkane Resources has completed its merger with Mandalay Resources, creating a dual-listed gold and antimony producer with a robust growth pipeline and a strong cash position.
- Merger completed via statutory plan of arrangement
- Mandalay shareholders receive 7.875 Alkane shares per Mandalay share
- Combined company to list on ASX and TSX under ticker ALK
- Pro forma cash position of A$218 million
- Expected production growth from 160,000 to over 180,000 gold equivalent ounces
A Transformative Merger
Alkane Resources Limited has officially closed its merger with Mandalay Resources Corporation, marking a significant milestone in the Australian and Canadian mining sectors. The transaction, executed through a statutory plan of arrangement under British Columbia law, sees Alkane acquiring all outstanding Mandalay shares. Mandalay shareholders will receive 7.875 fully paid Alkane shares for each Mandalay share held, effectively consolidating the two companies into a single entity operating under the Alkane banner.
This merger creates a dual-listed company on both the Australian Securities Exchange (ASX) and the Toronto Stock Exchange (TSX), with the combined entity expected to begin trading on the TSX around August 8, 2025. The dual listing enhances the company’s access to capital markets and broadens its investor base across two continents.
Strengthened Asset Base and Production Outlook
The combined company now operates three cash-generating mines located in premier jurisdictions – the Costerfield gold-antimony mine in Victoria, Australia; the Tomingley gold mine in New South Wales, Australia; and the Björkdal gold mine in Sweden. These assets underpin a solid production base estimated at 160,000 gold equivalent ounces for fiscal year 2025, with projections rising to over 180,000 ounces in 2026.
Beyond production, the merger brings a strong financial position with pro forma cash reserves of approximately A$218 million. This liquidity provides the company with the flexibility to pursue organic growth opportunities and advance exploration projects, including the promising Boda-Kaiser gold-copper deposit discovered in 2019.
Governance and Strategic Vision
The new Alkane board reflects the merger’s collaborative spirit, incorporating three former Mandalay directors alongside existing Alkane leadership and a new independent chair, Andy Quinn, a seasoned mining engineer and investment banking veteran. Nic Earner continues as Managing Director and CEO, supported by a management team that includes key former Mandalay executives to ensure operational continuity.
Both companies’ leadership emphasize the merger’s potential to create a more resilient and scalable platform. Nic Earner highlighted the enhanced financial flexibility and growth focus, while Frazer Bourchier, former Mandalay CEO and now Alkane non-executive director, expressed confidence in the company’s diversified production base and improved market liquidity as catalysts for a valuation re-rating.
Regulatory and Reporting Milestones
Following the merger, Alkane has become a reporting issuer across Canadian provinces (excluding Québec) and plans to file comprehensive technical reports on its key projects in compliance with Canadian NI 43-101 standards. These filings will provide investors with detailed insights into the company’s resource base and operational outlook, supporting transparency and informed decision-making.
The delisting of Mandalay shares from the TSX is expected shortly, completing the transition to a unified corporate structure. The company’s dual listing and enhanced scale are anticipated to improve trading liquidity and support inclusion in key market indices.
Bottom Line?
As Alkane integrates Mandalay’s assets and expertise, investors will watch closely to see if the combined entity can deliver on its growth promises and secure a market re-rating.
Questions in the middle?
- How smoothly will the operational integration of Mandalay’s assets proceed?
- What are the near-term exploration and development plans for the Boda-Kaiser project?
- Will the dual listing on the TSX translate into sustained trading liquidity and investor interest?
