Guinea Gold Plays Robex and Predictive Discovery to Merge
New West African mid-tier producer to be created
Predictive Discovery (ASX: PDI) and Robex Resources Inc (TSXV: RBX) have agreed to merge to create a new West African mid-tier gold producer, focused on Guinea.
The deal will combine Robex’s Kiniero project in Guinea, which is on schedule to achieve first gold production in December 2025 and is expected to produce an average of 139,000 ounces of gold per annum over nine years, and PDI’s neighbouring Bankan project, which is expected to produce 250,000ozpa over more than 12 years.
The two companies agreed to a merger of equals via a Quebec plan of arrangement with PDI offering 8.667 shares for every Robex share held.
PDI shareholders will hold 51% of the enlarged company, which has an implied market capitalisation of A$2.35 billion, or C$2.16 billion.
The company will continue to be listed on the ASX and PDI will apply for a Toronto Venture Exchange listing.
“The combined entity’s mineral resources, production profile and cost base are highly compelling, with a total mineral resource of over 9.5 million ounces, annual production well in excess of 350,000ozpa, and all-in sustaining costs of US$1070 an ounce,” PDI managing director Andrew Pardey said on a conference call on Monday morning, Australian time.
“The MergeCo is positioned to become a producer of note in West Africa.”
Pardey, the former CEO of Centamin, will move to non-executive chairman, while Robex managing director Matthew Wilcox, a former chief operating officer of West African Resources (ASX: WAF), will lead the combined company.
Bankan funding de-risked
Wilcox described PDI’s Bankan project as “most definitely the best undeveloped gold project in the world”.
The June definitive feasibility study outlined a US$463 million operation with a post-tax net present value (5% discount rate) of US$1.6 billion, internal rate of return of 46% and a payback period of less than two years at a gold price of US$2400/oz.
The NPV increases to US$2.9 billion, the IRR to 73% and the payback period drops to just over a year at a gold price of US$3300/oz.
PDI had been working towards making a final investment decision in the first half of next year.
Pardey said the merger would de-risk Bankan’s funding.
Robex also holds an 80% stake in the Nampala mine in Mali, which is expected to produce 47,000oz of gold this year at AISC of US$1500/oz.
“It’s small but kind of mighty in terms of its cash generation,” Wilcox said.
Pardey said Robex’s Kiniero mine was expected to contribute US$160 million of cash in 2026, based on a gold price of US$2400/oz.
“And obviously now the gold price is significantly higher than that,” he said.
“Options and warrants are projected to bring in an additional US$106 million.
“Together, these sources provide access to over US$200 million in unlevered cash.
“The ability to fund Bankan using internal cashflows and financial instruments gives the merge company greater flexibility in exploring additional financing options.”
Increased scale
Pardey said the enlarged entity would benefit from synergies.
“We are all extremely excited about combining our exploration campaigns and budgets and prioritising our efforts to rapidly grow what already is a considerable gold inventory,” he said.
“The operating of two mines which are in close proximity brings significant cost savings, centralised maintenance programs, optimising spares and equipment and other resources critical to the smooth running of such a large operation.
“Procurement also benefits from economies of scale, particularly when purchasing equipment, consumables and technology, as well as building a stronger key supplier relationships and also through coordinating our environmental discipline, we will have more control over the impact we make from our operations.”
Pardey said the company would also benefit from enhanced capital market relevance, leading to the potential for a re-rating.
“We’ll have a market valuation of approximately US$1.5 billion,” he said.
“We believe that this valuation, a combination of market caps of both companies, has significant upside, particularly in narrowing the substantial discount to immediate peers, as reflected in NPV ratios, production growth and cashflow forecasts.”
The enlarged PDI is hopeful it will become eligible for inclusion in the ASX 200 and GDXJ indexes.
Shareholder support
PDI has long been touted as a takeover target itself, due to its crowded share register.
Perseus Mining (ASX: PRU) acquired a 19.9% of PDI last year but has recently described PDI as expensive.
In February, PDI raised A$69.2 million via a strategic placement to the Lundin family and Zijin Mining, giving them 4.5% and 3.5%, respectively, diluting Perseus to 17.8% in the process.
BlackRock holds 13.2%, T. Rowe Price has 6%, while other funds including Merk, Van Eck and Franklin Templeton also sit on the register, holding a combined 60% of the stock.
Meanwhile, Wilcox told last month’s Mining Forum Americas that the company had a “rockstar register” after two large capital raisings in the past 16 months, including as part of an ASX dual listing in June.
The recent Australian listing increased market speculation about a potential combination with PDI.
The deal requires the support of two thirds of Robex shareholders.
Robex directors and management and two of Robex’s largest shareholders, the Cohen Group and Eglinton Mining, collectively holding around 25.5% of Robex shares, have entered into separate voting support agreements with PDI.
The transaction is expected to close in December 2025 or early 2026.