Kin and PNX make move

Shares in Kin Mining dipped by 11 per cent early on Monday morning, following news that the resources company will likely merge with PNX Metals, after both parties signed a scheme of arrangement.

Kin closed trade at 7.7 cents per share, down 9 per cent. 

The combined entity, which has an estimated market cap of $123 million, would have a mineral resources portfolio of more than 1.4 million ounces of gold, 16 million oz of silver and 177,000 tonnes of zinc.

On February 15, Kin told the market it had begun early discussions with multiple companies about potential acquisition and investment options – along with confirming it had submitted a non-binding and indicative offer to PNX. 

Under the agreement, PNX shareholders will receive 1 fully-paid ordinary Kin share for every 13 PNX shares held.

Kin shareholders would hold a 72 per cent stake in the combined entity, with PNX shareholders controlling the remaining 28 per cent.

Despite both boards having unanimously approved the merger in absence of a superior proposal, the implementation of the agreement is subjected to several conditions, along with Kin and PNX shareholder approval.

The Osborne Park-based company stated both Rowan Johnston and Hansjoerg Plaggemars would abstain from the recommendation, as the men sit on both boards. 

Kin executive director Nicholas Anderson said the junior was hopeful both parties could successfully complete the transaction.

“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 mergers and acquisitions and corporate opportunities Australia-wide,” he said.

“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.”

These sentiments were echoed by PNX’s executive chair Graham Ascough.

“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,” he said.

“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.”

Kin, which has substantial gold interests across WA, began 2024 strongly after receiving $15 million in cash, along with 21.9 million shares in Genesis Minerals, after selling some of its selected gold deposits to the company.