CHARTS: The coming critical minerals trade war is BRICS short of a load
"While a large number of countries around the world continue to talk about securing raw material supply, China is actually doing something about it."
Mawson Gold (TSXV: MAW) and Southern Cross Gold (ASX: SXG) agreed to merge this week, creating a new dual ASX and TSXV-listed company named Southern Cross Gold after Mawson spun out Southern Cross in 2022. The deal comes days after Southern Cross doubled the size o fits Sunday Creek drilling program over the next year in Victoria.
The deal is valued at around A$518.8 million ($343m), based on Southern Cross Gold’s share price of A$2.82 on June 11. The combined company will be worth about A$1.03 billion. Mawson owns a 51% stake in Southern Cross, which it values at about A$270.4 million based on the June 12 stock prices.
“The simpler, dual-listed structure will allow us access to broader capital markets and institutional/private investors; eliminate the perceived major shareholder overhang; and attract an expected lower cost of equity capital,” Mawson special committee and board member Bruce Griffin said in a statement.
The deal comes as the gold mining industry sees more of a trend towards consolidation, with companies merging to achieve economies of scale, reduce operational costs, and enhance their market position. Griffin suggests the merger of Mawson and Southern Cross Gold fits this trend, with widespread shareholder support in Canada and overseas to simplify the partners’ respective corporate structures.
Under the Australian scheme of arrangement, Mawson will acquire the other half of Southern Cross’ shares it doesn’t already own. Southern Cross shareholders will receive a 50.4% equity stake in the new company. This merger aims to simplify the corporate structure and improve access to capital markets, helping to develop the cornerstone gold-antimony project.
The merger is expected to be completed in three to four months, pending shareholder and regulatory approvals.
The Sunday Creek project is about 60 km north of Melbourne within 193.7 sq. km of granted exploration tenements.
Southern Cross has recently doubled its drill program to 60,000 metres over the next 12 months at Sunday Creek, reporting high-grade assay results, including 38 intersections with grades over 100 grams per tonne gold-equivalent. The deepest hole extended mineralization by 80 metres and intercepted 11 high-grade vein sets.
The enhanced campaign will expand with additional rigs and advanced techniques to explore a significant trend.
Mawson also announced plans on June 10 to spin off its Swedish uranium assets before finalizing the Australian arrangement. The company will either distribute shares of Euro Canna Holdings to Mawson shareholders or sell the assets. Euro Canna holds most of Sweden’s historic uranium resources, totalling 22.7 million lb. of uranium oxide, according to Mawson.
While nuclear energy generates 40% of Sweden’s electricity, a moratorium on uranium mining has been in effect since May 2018. The law does allow for exploration and development. The Swedish government is considering lifting this ban.
The government recently completed an inquiry into the ban, concluding on May 15, with a public announcement expected soon.
