Kin Mining and PNX Metals have announced a merger agreement that will see Kin acquiring all issued shares of PNX.
The new combined business entity will be capitalised at A$123m ($79.7m) and will boast a balance sheet with A$89.6m in cash and liquid investments, no debt and a diverse portfolio of mineral assets.
The merger of Kin Mining and PNX Metals would create a diversified portfolio of quality mineral assets in Tier-1 jurisdictions across Australia.
It will hold more than 1.4 million ounces (moz) of gold, 16.2moz of silver and 177,000 tonnes of zinc in mineral resources, with significant potential for near-term expansion.
Additionally, the combination will bring together multiple highly prospective gold, base metal and uranium prospects in Tier-1 jurisdictions.
As per the terms of the agreement, PNX shareholders will receive one fully paid ordinary share in Kin for every 13 fully paid ordinary PNX shares they hold.
This exchange ratio implies a 6.2% premium based on the 30-day volume-weighted average prices of both companies' shares.
Upon completion, Kin and PNX shareholders will own approximately 72% and 28% of the merged group, respectively.
PNX executive chairman Graham Ascough said: “The merger of Kin and PNX is set to create one of the most exciting growth stocks in the junior resource sector on the ASX [Australian Securities Exchange].
“The combined entity will have unparalleled balance sheet strength, a dynamic management team comprising like-minded individuals from each company, and a fantastic exploration and growth pipeline in WA [Western Australia] and the NT [Northern Territory].”
The independent directors of PNX have unanimously recommended the scheme and intend to vote all their PNX shares in favour of the scheme in the absence of a superior proposal.
The independent directors of Kin have also given their unanimous support for the merger.
The companies have expressed that the merged group will be well-positioned to expedite exploration and expand their multi-asset growth pipeline.
The merger will also increase the group's capacity for meaningful base metal exploration and growth, leveraging existing defined volcanic-hosted massive sulphide (VHMS) deposits and promising exploration targets in WA and the NT.
The completion of the scheme is contingent upon several conditions, including the approval of the Australian Foreign Investment Review Board, the consent of shareholders of both Kin and PNX, and other customary closing conditions.
KIN executive director Nicholas Anderson said: “The proposed merger with PNX is consistent with Kin’s recently articulated strategy of leveraging its strong balance sheet position and expertise to pursue value-adding M&A and corporate opportunities Australia-wide.
“PNX has an extensive and high-quality tenement portfolio in the Pine Creek region of the Northern Territory, one of Australia’s most prolific resource provinces.”
