Kin Mining to merge with NT-focused PNX Metals to create company worth $123 million

Northern Goldfields-focused Kin Mining will merge with Northern Territory-focused PNX Metals to create a new company with a market capitalisation of $123 million. Kin told the ASX on Monday the scheme of arrangement would see it acquire 100 per cent of the PNX shares on issue. It said the new company would have mineral resources of more than 1.4 million ounces of gold, 16.2Moz of silver and 177,000 tonnes of zinc, with significant near-term expansion potential, and multiple highly prospective gold, base metal and uranium prospects. Kin said PNX shareholders would receive one fully paid ordinary share in Kin for every 13 fully paid ordinary PNX shares, which is a 6.2 per cent premium of the 30-day volume-weighted average price of Kin and PNX shares, respectively. Upon implementation, Kin and PNX shareholders will hold 72 per cent and 28 per cent of the merged group, respectively. The independent directors of both companies have unanimously recommended the merger in the absence of a superior offer. The merged company would have cash and liquid investments of $89.6m and no debt. Kin executive director Nicholas Anderson said the proposed merger was consistent with Kin’s recently articulated strategy of leveraging its strong balance sheet position and expertise to pursue value-adding mergers and acquisitions 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,” he said. ”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 the northern Goldfields). “This is a great example of sensible consolidation in the junior resource sector in what remains a challenging market for small companies.” PNX executive chairman Graham Ascough said PNX shareholders would gain exposure to Kin’s high-quality gold projects in the Leonora region, where it had 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,” he said. “The combined entity’s strong funding position and enhanced liquidity will allow us to accelerate exploration of PNX’s Thunderball uranium project and the development of our gold, silver and polymetallic resources at Fountain Head and Hayes Creek.”