Rather than using the recent gains from the sale of several gold deposits in Western Australia’s Leonora region to play in the consolidation game by seeking stranded resources to feed its ambitions for a gold plant at Cardinia, it has made a pass at Northern Territory-focused PNX Metals.
Kin, which has around A$75 million in cash and Genesis Minerals shares, confirmed it has had early talks with the Graham Ascough-chaired PNX about a potential merger, providing a non-binding and indicative term sheet to PNX.
It said PNX was just one of several explorers it was talking to, mainly focusing on interests in WA considered prospective for gold and other metals.
PNX confirmed that discussions were incomplete.
At the project level the two companies have little in common, but they share two common directors: Hansjoerg Plaggemars and Rowan Johnston.
Plaggemars represents German fund Delphi, which owns 41% of Kin. Delphi owns a similar chunk of PNX.
Kin has primarily been a Leonora gold explorer and has remaining resources of 932,000oz gold at Cardinia, but more recently, it has highlighted the base metal potential with its new Albus VMS discovery.
PNX has been on investors’ radars since last year when it recovered the uranium rights over its NT copper-gold-zinc licences at Hayes Creek and Fountain Head after a decade with a third party.
The timing was perfect with the spiking uranium price, allowing PNX to benefit from some previously unreported high-grade assays, but flag an upgrade to the existing shallow resource at Thunderball.
PNX has previously styled itself as a gold and base metals producer with resources of 520,900oz gold, 16.2Moz silver, 177,000t zinc, 37,000t lead, and 10,000t copper.
It has been studying an initial 70,000-80,000ozpa gold equivalent operation at Fountain Head for the past several years, while advancing exploration of its 1500sq.km in permits including some recently defined kilometre-scale gold targets.
PNX started the year with $1.2 million cash, so a merger with Kin would solve its immediate cash flow projects, and it could share its VMS learnings in the NT with Kin.
Kin would gain a second advanced development asset, and more geographical and resource diversity.
PNX shares were up 20% to 0.6c today, capitalising it at $32 million, while Kin shares dropped 9% to 6.7c, reducing its valuation to $79 million, however Kin shares hit a 12-month high of 7.4c earlier in the session.
