Two months after it was first mooted, Kin Mining (ASX:KIN) and PNX Metals (ASX:PNX) are set to marry in an all-share union of mining's smaller players.
Kin had raised the possibility of a PNX deal back in mid-January.
Trading in Kin's shares was halted to allow for the likely confirmation of the deal to be announced by Tuesday, April 16. However, on Monday, a $123 million production was unexpectedly revealed via a scheme of arrangement.
The deal will see PNX shareholders receiving one fully paid ordinary share in KIN for every thirteen fully paid ordinary PNX shares held. Kin had a market value of $101 million at Friday’s close of 8.5 cents, while PNX’s shares were at half a cent, valuing it at just $26.9 million.
"The Merged Group, capitalized at $123.0 million, offers compelling value and an exceptional platform for growth with a balance sheet consisting of $89.6 million in cash and liquid investments and no debt,” Kin said in its statement to the ASX.
"The merger will create a diversified portfolio of quality mineral assets in Tier-1 jurisdictions across Australia hosting total Mineral Resources in excess of 1.4 Moz gold, 16.2 Moz silver and 177 Kt zinc with significant near-term expansion potential, and multiple highly prospective gold, base metal, and uranium prospects.
(Not a mention of lithium anywhere and if there’s any nickel, well, we’ll have to dig to find it).
Once the marriage is done, Kin shareholders will control 72% of the new company and PNX holders will have the rest.
Independent directors of both companies have recommended the deal with the usual proviso in the absence of a superior proposal.
- The Independent PNX Directors unanimously recommend the Scheme and intend to vote all their PNX shares in favor of the Scheme in the absence of a superior proposal, and subject to the Independent Expert concluding in the Independent Expert's Report (and continuing to conclude) that the Scheme is in the best interests of PNX shareholders.
- The Independent KIN Directors unanimously recommend the Scheme and intend to vote all their KIN shares in favor of the resolution to be put to KIN shareholders for the purposes of ASX Listing Rule 10.1 in respect of the acquisition of the PNX shares from certain substantial shareholders of PNX pursuant to the Scheme, in the absence of a superior proposal.
