Mandalay Resources (MND) M&A Announcement summary

Deal rationale and strategic fit

• Merger creates a diversified gold and antimony producer with three operating mines and a major development project in Australia and Sweden, targeting 160,000 gold-equivalent ounces in 2025 and 180,000 in 2026.

• Enhanced scale, diversified production, and exposure to strategic minerals like antimony reduce risk and improve market positioning.

• Combined company will have increased production, resource base, and a vision for organic and inorganic growth, supported by a robust balance sheet and experienced leadership.

• Mandalay shareholders gain access to Tomingley’s production and Boda-Kaiser’s growth, while Alkane shareholders benefit from antimony exposure and a stronger balance sheet.

• Both companies share a culture focused on operational discipline, exploration, and growth.

Financial terms and conditions

• Mandalay shareholders receive 7.875 Alkane shares per Mandalay share; post-merger, Mandalay and Alkane shareholders will own 55% and 45% of the combined company, respectively.

• Implied market capitalization of the combined company is over AUD 1 billion (A$1,013M/C$898M).

• Combined cash balance of A$188M/C$167M as of March 31, 2025, with A$60M in debt from Alkane's Tomingley expansion.

• Mutual break-fee of A$17M payable under certain circumstances.

• Transaction implies a 2% premium to Mandalay's share price based on last close, but a 6% discount on a 20-day VWAP.

Synergies and expected cost savings

• Enhanced trading liquidity and anticipated inclusion in GDXJ and ASX 300 indices expected to drive increased institutional demand and valuation rerate.

• Diversified asset base reduces risk and supports economies of scale, with potential for further acquisitions.

• Combined company expects margin expansion, with AISC per ounce projected to decrease from ~A$2,750/US$1,760 in 2025 to ~A$2,160/US$1,420 in 2026.

• Well-capitalized platform to fund exploration, development, and inorganic growth.