Resources Top 5: Alkane and Mandalay to merge as gold activity heats up

High gold prices are seeing an increase in M&A activity in the sector with the latest involving the merger of producers Alkane Resources and Mandalay Resources.

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• A merger of equals between Alkane and Mandalay will create a powerhouse gold and antimony producer 

• Dart Mining has signed option agreements with Infinity Lithium for two non-core projects in Victoria

• Western Gold Resources has raised $1.05m to move its Gold Duke project towards production

Your standout small cap resources stocks for Monday, April 28, 2025

Alkane Resources (ASX:ALK)

High prices are seeing an increase in M&A activity in the gold sector with the latest involving the merger of two producers, ASX-listed Alkane Resources and TSX-listed Mandalay Resources.

Another gold-related play has seen Dart Mining sign an options agreement with Infinity Lithium for INF to potentially acquire two non-core DTM gold prospective properties in Victoria.

The yellow metal has come off its high of US3500/oz early last week and was trading just under $3300 at the time of writing but the market fundamentals remain in place for continued strong prices.

Commbank mining expert Vivek Dhar even predicts that gold could rise to US$3750/oz by the end of the year.

“Even though gold prices and central bank gold purchases have shown virtually no correlation in the last two years to the end of 2024, the anticipation of more central bank buying, combined with extraordinary safe‑haven demand, may see gold rise to $US3750/oz by year‑end,” he said in a note.

“The risk that gold rises above our forecast can’t be ruled out either but our expectation for price growth to slow relative to what we’ve seen so far this year is tied to the risk that Trump continues to walk back current trade policy and that gold has already priced in significant uncertainty.”

The merger of equals Alkane and Mandalay is set to create a powerhouse gold and antimony producer with three high-performing mines across Australia and Sweden – Alkane’s Tomingley in NSW and Mandalay’s Costerfield in Victoria and Bjorkdal in Sweden.

It will create a billion dollar gold producer that will also bring Australia’s only operating antimony mine to the ASX. Costerfield is the only domestic producer of the critical mineral.

The combined company will operate as Alkane Resources and will produce an estimated 160,000 gold equivalent ounces in 2025, growing to more than 180,000oz in 2026. There is also  the likelihood of plenty more with Alkane’s massive, pre-development Boda-Kaiser gold-copper project not far from Tomingley.

Mandalay shareholders will receive just under eight Alkane shares for each Mandalay share … resulting in Mandalay and Alkane shareholders owning a respective 55% and 45% of the combined entity.

The new Alkane will hold a robust proforma cash balance of $188m as of March 31, 2025.

Investors welcomed the arrangement with ALK shares as much as 4.94% higher to 78.7c. From 61c on April 7, ALK shares increased to 83.5c on April 22, a 12-month high.

Alkane’s managing director Nic Earner will lead the Australian-based executive team while the board will include nominees from both companies, with Andy Quinn as chair. 

“The transaction will take Alkane to a new level, bringing together two companies with complementary assets and a shared vision for growth,” Earner said. 

“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.”

“We are excited to have found a like-minded partner committed to the same principles,” Mandalay president and CEO Frazer Bourchier said. “The transaction aligns with our vision to create a mid-tier gold and antimony producer with mines in premier operating jurisdictions and with our strategy for continued growth.”

Infinity Lithium (ASX:INF) and Dart Mining (ASX:DTM)

As it intends to concentrate more fully on gold and antimony in Queensland, Dart Mining has signed option agreements with Infinity Lithium which could see the latter acquire two of its non-core gold-prospective projects in Victoria.

The agreements could see Infinity Lithium acquiring 100% of its Mitta Mitta tenement package in eastern Victoria and entering an earn-in joint venture on the Corryong gold-copper-silver-molybdenum exploration project in the same region.

Both are in the highly prospective southern part of the Lachlan Fold Belt (LFB), a geological region known for its long history of mineral production, complex geology and potential for new discoveries. The belt is home to more than 105Moz of gold and millions of tonnes of copper.

INF has a 60-day exclusivity period in which it can enter into a 100% purchase agreement in respect to Mitta Mitta and a JV to earn up to 80% in Corryong.  

The agreement has seen INF shares as much as 40% higher to 2.8c and DTM shares up by 11% to 0.5c.

DTM executive chairman James Chirnside said the board was delighted to enter into the option agreements with Infinity Lithium. 

“The terms of the arrangements allow Dart to continue with its focus on progressing its other projects in Queensland and Victoria,” he said.

“The arrangements allow for Infinity Lithium to rapidly expand its footprint in Victoria – it really is a win for both parties.” 

For INF, the agreement with Dart follows the acquisition last month of four advanced gold assets in Victoria from Highland Resources, a subsidiary of private company Jubilee Metals. 

That acquisition comprised multiple drill-ready targets also in the LFB, offering immediate exploration opportunities while it awaits approval of a mining licence application for its flagship San José lithium project in Spain.

INF executive chairman Adrian Byass said the agreements gave the company the opportunity to carefully assess its next move. 

If it decides to go ahead, the Mitta Mitta project adjoins existing INF tenure and would consolidate prospective geological host rocks as well as historical goldfields that have produced in excess of 160,000oz gold. 

“That some project tenements under option immediately adjoin recently acquired existing tenure provides outstanding synergies,” he said. 

“The opportunity to potentially expand our existing gold-copper-silver portfolio with opportunities such as walk-up drill targets extending high-grade results in the Lachlan Fold Belt and combine our immediate exploration focus is highly attractive.”

Western Gold Resources (ASX:WGR)

Professional and sophisticated investors have demonstrated confidence in the push by Western Gold Resources to move its Gold Duke project towards production by supporting a $1.05m capital raising.

Funds raised through the placement of 24.78 million shares at 4.25c each will be used to finalise negotiations and select a gold processing option, update the September 2024 scoping study, and finalise stage 1 grade control and infill drilling plans.

Gold Duke is a shovel-ready project with a resource of 3.25Mt at 2.1g/t for 214,000oz of contained gold.

WGR’s planned stage 1 development will focus on the production of 34,000oz of gold from the Eagle, Emu, Gold King and Golden Monarch deposits.

Based on the gold price of ~$3500/oz in September 2024, this would generate an estimated undiscounted accumulated cash surplus of $38.1m with capex estimated at between $2.1m and $2.5m.

This could be hugely conservative as the combination of rising gold prices and the weakness of the Australian dollar against the US dollar has nudged the Australian price of the precious metal up close to the $5150/oz mark.

Managing director Cullum Winn said the capital raise significantly strengthened the company’s financial position and enhanced its ability to progress Gold Duke through its initial stage 1 development.

“The timing is particularly favourable, coinciding with strong gold market conditions as we advance discussions on gold processing and we welcome to the register the strongly performing Investius Microcap Fund,” he added.

Shares have increased 14% to a daily high of 5.7c.

Metal Bank (ASX:MBK)

(Up on no news)

Metal Bank, which holds a portfolio of advanced copper, cobalt and gold exploration projects in Australia and in the Middle East, has advanced 30% to 1.3c.

Earlier this month the company was granted $275,000 as part of the Queensland Government’s critical minerals Collaborative Exploration Initiative program to further assess the graphite potential at the Millennium cobalt-copper-gold-graphite project near Cloncurry in the state’s northwest.

Grant-supported work will include additional diamond drilling, re-assaying of previous drill samples and preliminary metallurgical work.

MBK has a 51% interest in Millennium and the right to earn up to 80%. 

Thick high-grade graphite intersections were returned in late 2024 within and adjacent the existing JORC 2012 inferred resource at Millennium of 8.4Mt at 0.09% Co, 0.29% Cu and 0.12g/t Au. 

The work programs will aid in understanding of the scope, distribution and economic implications of the graphite at Millennium that has now been defined over 2km of strike and has returned considerable grades in drilling up to 56m at 18.29% TGC.

MBK has a 75% interest in the advanced Livingstone Gold Project in WA which holds a JORC

2012 resource estimate of 2.81Mt at 1.36g/t Au for 122,500oz along with the 8 Mile, Wild Irishman and Eidsvold gold projects in South East Queensland.

It also holds the Wadi Al Junah project and exploration licence applications in Saudi Arabia along with three granted copper projects in Jordan

Tambourah Metals (ASX:TMB)

A big mover has been Tambourah Metals, up as much as 54% to 4c on volume of more than 34 million after extending gold mineralisation at the high-grade Tambourah King lode system within its namesake project in WA.

All 11 holes in an RC drilling program intersected the ~10m wide Tambourah King structure that 

extends over a strike distance of 200m and remains open to the north and south.

Results include:

• 3m at 2.99g/t gold from 36m and 2m at 3.68g/t from 47m;
• 3m at 2.93g/t Au from 73m;
• 5m at 1.35g/t Au from 92m;
• 2m at 1.25g/t Au from 93m and 5m @ 1.46g/t Au from 100m.

An EIS drilling grant of up to $180,000 to co-fund drilling of historical high-grade gold targets at Tambourah will start this quarter.

The project is within the Tambourah Goldfield, is 85km southwest of Marble Bar and comprises a series of shallow workings developed on north-south oriented quartz lodes over 3km of strike.

“We’re pleased with these results that have continued to identify extensions to the Tambourah King gold mineralisation,” Tambourah Metal’s executive chairperson Rita Brooks said. 

“We are now preparing the next part of the drill program to confirm and model a preliminary inferred gold resource.”

This article does not constitute financial product advice. You should consider obtaining independent financial advice before making any financial decisions. While Western Gold Resources is a Stockhead advertiser, they did not sponsor this article.

Originally published as Resources Top 5: Alkane and Mandalay to merge as gold activity heats up