Astral eyes Maximus Resources in latest junior gold M&A action

Astral Resources reports 7c non-binding proposal to take over Maximus Resources
Companies have neighbouring projects in WA’s Kambalda gold field
Astral has also separately acquired a 19.99% stake in Maximus
Astral and Maximus host ~1.8Moz in resources

Special Report: Astral Resources has proposed a non-binding takeover bid for its Kambalda gold field neighbour Maximus Resources (ASX:MXR) for 7c per share by way of an all-scrip, off-market takeover.

The move could see the parties combine to create a company with a substantial resource inventory of around 1.8Moz, consolidating key assets in the Kambalda region of WA’s Eastern Goldfields.

Astral Resources (ASX:AAR) boasts over 1Moz of gold in its growing Mandilla and Feysville projects near the famous Goldfields mining town and has long been mooted as a logical target for South African giant Gold Fields, which needs additional material for its St Ives gold mine.

On the flip side, the $19 million capped MXR owns the ~250,000oz Wattle Dam gold project, the lower grade material (5.4Mt at 1.45g/t) identified after Ramelius Resources mined the extraordinarily high grade and nuggety gold found near surface in its early stages as an ASX listed gold miner (267,000oz at 10.6g/t from 2006-2012).

Astral considers the transaction a “compelling opportunity for Maximus shareholders”, who would also benefit from significantly more share liquidity and no near-term capital raising requirements.

Not to mention, the offer price represents a 56% premium to Maximus’ last closing price of 4.5c on December 24, 2024.

“The proposed offer price also represents a value of $91/oz based on the current Maximus published JORC-compliant mineral resource estimates,” AAR said.

The Maximus Board has not made a final determination, but has agreed to progress due diligence and negotiations of a binding transaction implementation deed with Astral on an exclusive basis.

Astral acquires 19.99% stake

In addition, AAR entered into two separate share sale agreements to acquire approximately 85.5 million Maximus shares, representing a stake of around 19.99%.

That transaction was conducted with major Maximus shareholders Beacon Minerals and Colin Petroulas, with Astral agreeing to issue approximately 40.8 million of its own shares as consideration for the stake.

Based on the two-day volume weighted average price (VWAP) of Astral shares up to and including December 24, 2024, the implied acquisition price was approximately 7c per Maximus share.

Prior to Astral dipping into Maximus, Petroulas and Beacon represented more than a combined 153 million shares held in the WA goldie.

Earlier this month, Petroulas increased his holding in the company from 63.7 million shares to 69 million shares while an earlier annual report to Maximus shareholders in June showed Beacon held 84 million shares in the company.

Petroulas and Beacon’s remaining holding in Maximus now accounts for about 16% following Astral’s purchase.

If a merger comes to life it would create among the largest junior gold resource holders in the WA gold space.

The transaction would be the latest in a volley of corporate activity led by Northern Star’s $5bn takeover of De Grey Mining, along with smaller mergers like the Brightstar-Alto and Horizon-Greenstone marriages. Astral is in a unique position given the advanced state of its Mandilla project.

It’s caught the eye of institutional investors this year, raising $25 million in September to take the company through to a final investment decision.

A PFS is on the way after a scoping study last year estimated it would cost $191 million to deliver a decade-long mine at Mandilla producing around 100,000ozpa over its first seven years at all in sustaining costs of just $1648/oz.

The scoping study was conducted at just $2750/oz, with gold prices now coming in at well over $4000/oz on an Aussie dollar basis. Even then it boasted strong financial metrics including $740m in free cash flow, an internal rate of return of 73% and payback period of just nine months.

As of Astral’s latest resource update, Mandilla holds 1.27Moz of gold at 1.1g/t, with the addition of Feysville taking the total bounty to 1.46Moz at 1.1g/t.

This article was developed in collaboration with Astral Resources, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.