Kin Mining in $123m merger with explorer PNX Metals after cashing in on project sale to Genesis Minerals

Osborne Park-based Kin and PNX took to the market on Monday to announce the transaction, which will require two directors — Rowan Johnston and Hansjoerg Plaggemars — to sit out from making a recommendation because they are on both boards.

Mr Johnston is chair of Kin and a non-executive director at PNX and Mr Plaggemars is a non-executive director of both.

The deal will pull together Kin’s hatful of WA gold tenements, including holdings in the Goldfields, with PNX’s gold and base metals projects in the Northern Territory.

Under the proposed scheme of arrangement, investors in PNX would get one Kin share for every 13 PNX shares, with ownership of the new merged group to be split 72 per cent and 28 per cent to Kin and PNX shareholders, respectively.

The tie-up comes after Kin locked in a deal with Raleigh Finlayson-led Genesis Minerals which bought the Bruno-Lewis and Raeside gold projects in December for $53m in cash and shares.

The deal bumped up Kin’s coffers to about $66.1m, at a time when explorers more broadly are struggling for cash.

PNX executive chair Graham Ascough said the merger would create “one of the most exciting growth stocks in the junior resources 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,” he said.

Kin has made it known in the past month that it was ready to start weighing up potential mergers and acquisitions.

The company’s independent board committee, made up of directors Guiseppe Graziano and Nicholas Anderson, has recommended shareholders accept the deal.

Should it go ahead, the pair would both be on the new entity’s board and be joined by PNX director Graham Ascough, alongside Mr Plaggemars, with Mr Johnston to stay on as executive chair.

Announcing the transaction Kin said deposits in the Leonora region would be close to existing processing plants with approved mining proposals.

The deal is targeted for a late August finish.