Special Report: Kin Mining and PNX Metals have unveiled plans for a merger that marks the entry of a new growth stock with exposure to uranium, precious and base metals.
The combined company’s portfolio of mineral resources will exceed 1.4 million ounces of gold, 16.2 million ounces of silver and 177 thousand tonnes of zinc.
There’s strong potential for more, thanks to significant near-term expansion potential, as well as multiple highly prospective base metal and uranium prospects across Western Australia and the Northern Territory.
Highlights of the portfolio include PNX (ASX:PNX)’s exciting Fountain Head gold and Hayes Creek zinc-gold-silver projects and its Thunderball uranium project, all in the mineral-rich Pine Creek region of the NT.
Thunderball earned PNX No. 4 spot on MinerDeck’s global list of top uranium intercepts for Q1 2024, putting it a long way ahead of other Aussie explorers.
Quarterly uranium drilling highlights — Q1 pic.twitter.com/e3tqlM2tGZ
— MinerDeck (@MinerDeck) April 2, 2024
The new entity will also have significant gold mineral resources in WA’s Leonora region close to existing processing plants.
The WA assets additionally have potential for high-grade gold discoveries and project expansion due to promising recent volcanic-hosted massive sulphide (VHMS) discoveries.
VHMS systems are some of the richest sources of metals such as copper, lead and zinc, as well as gold and silver.
Kin’s strategic spend
With $75m in cash and shares following the sale of selected gold deposits within its Cardinia project in WA to Genesis Minerals (ASX:GMD), Kin Mining (ASX:KIN) said earlier this year it was eyeing a “range of strategic opportunities”.
Now, under the deal enabled by a transformative Scheme of Arrangement, Kin Mining willacquire 100% of PNX’s shares, creating an entity with a market cap of A$123 million, a strong balance sheet consisting of a very healthy A$89.6 million in cash and liquid investments and zero debt.
PNX shareholders will receive one fully paid ordinary share in KIN for every 13 fully paid ordinary PNX shares held on the Scheme record date. On a like-for-like basis, this represents a 6.2% premium using the 30-day volume-weighted average price (VWAP) of KIN shares and PNX shares respectively.
Once the deal is complete, Kin and PNX shareholders will collectively hold approximately 72% and 28% of the merged group respectively.
Pooling strengths
Mr Graham Ascough, Executive Chairman of PNX, commented: “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. 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 and the NT.
“PNX shareholders will gain exposure to Kin’s high-quality gold projects in the Leonora region, where it has a proven track record of value-creation through its recent transactions with Genesis Minerals. Kin’s retained gold inventory in this district offers outstanding optionality and growth potential, particularly in a rising gold market, along with the upside of its recent VHMS base metal discovery and other recent exploration breakthroughs.
“The combined entity’s strong funding position and enhanced liquidity will allow us to accelerate exploration of PNX’s exciting Thunderball Uranium Project and the development of our polymetallic resources at Hayes Creek.”
Nicholas Anderson, Non-Executive Director of Kin, said: “The proposed merger with PNX Metals 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. This portfolio includes a unique mix of development-level zinc, gold and silver assets and an exciting uranium deposit at Thunderball that has sat dormant for over a decade.
“Kin’s strong balance sheet position gives us the capability to evaluate and fast-track the exploration of these projects, in parallel with our ongoing gold and base metal exploration at Cardinia in WA. This is a great example of sensible consolidation in the junior resource sector in what remains a challenging market for small companies. We are looking forward to working with the PNX team to complete this transaction.”
This article was developed in collaboration with PNX Metals, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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