Australia’s Alkane and Canada’s Mandalay to merge to create diversified mining company

Australian mining company Alkane Resources has signed a definitive arrangement agreement with Canadian miner Mandalay Resources for a "merger of equals" to create a diversified gold and antimony producer.

The estimated implied market capitalisation of the merged company is C$898m ($647.8m).

The merged entity will operate under the name Alkane Resources, maintaining its Australian Securities Exchange (ASX) listing and aiming for a Toronto Securities Exchange (TSX) listing.

Under the agreement, Alkane will acquire all issued and outstanding common shares of Mandalay through a court-approved plan of arrangement.

Mandalay shareholders will receive 7.875 Alkane shares for each share held, resulting in a 55% and 45% ownership split between former Mandalay and current Alkane shareholders, respectively.

The merged company will have a combined forecast production of approximately 160,000 gold-equivalent ounces (oz) in 2025, potentially growing to more than 180,000oz in 2026.

The combined company will benefit from the operations of three mines, comprising Alkane’s Tomingley gold mine in Australia, in addition to Mandalay’s Costerfield underground gold/antimony mine in Australia and the Björkdal underground gold mine in Sweden.

The merged entity is expected to have improved margins and capital market positioning. It will possess a strong balance sheet, featuring a projected cash balance of C$167m as of 31 March 2025, enabling it to pursue both organic and inorganic growth opportunities.

The combined company's Board of Directors will include nominees from both Alkane and Mandalay, with Andy Quinn serving as the new independent chair. The headquarters will be in Perth, Australia.

Upon closing, Alkane's Nic Earner will continue as managing director, with James Carter as chief financial officer.

Mandalay's Ryan Austerberry and Chris Davis will join Alkane's senior operational management, ensuring continuity at the Costerfield and Björkdal mines.

Alkane Nic Earner managing director said: "The transaction will take Alkane to a new level, bringing together two companies with complementary assets and a shared vision for growth. Mandalay’s two high-quality mines match the attributes of Tomingley: a proven history of consistent production, cash generation and exploration upside.

“The combination of assets, leadership and supportive long-term shareholders enhances our scale and financial strength, and positions us well to continue to pursue additional growth opportunities.”

The merger is expected to close in the third quarter of 2025 (Q3 2025), subject to regulatory and shareholder approvals.