ASX gold stock tumbles on big merger news

Predictive Discovery Ltd (ASX: PDI) shares are ending the year on a disappointing note.

In morning trade, the ASX gold stock is down 4% to 73.5 cents.

Why is this ASX gold stock tumbling?

Investors have been selling the gold miner’s shares despite the release of an update on its proposed merger with Robex Resources (ASX: RXR).

According to the release, Robex Resources shareholders have approved the merger of the two gold miners at a special meeting overnight.

The ASX gold stock highlights that Robex shareholders voted overwhelmingly in favour of the transaction. In fact, a total of 94.54% of votes recorded were in favour of the merger.

It notes that this satisfies one of the outstanding closing conditions under the arrangement agreement between Predictive Discovery and Robex Resources. That condition was at least 66% of the votes cast by Robex shareholders voting in person or by proxy at the meeting were in favour.

Though, there are still a few boxes to tick before the merger completes. Management points out that closing of the transaction is subject to the satisfaction of the remaining closing conditions, including the approval of the Superior Court of Quebec and receipt of the key regulatory approvals. The latter include the consent of the Government of Guinea and the consent of the Government of Mali.

But if everything goes to plan, the transaction is expected to close during the first quarter of 2026.

Commenting on the news, the ASX gold stock’s CEO and managing director, Andrew Pardey, said:

We are delighted with the strong support shown by Robex shareholders for the Transaction, which has the potential to create significant value for shareholders of the combined company. The Transaction consolidates two of the largest, lowest cost and most advanced gold projects in West Africa – Bankan and Kiniero – within a combined group with the execution capability and funding strength to grow into a significant gold producer with expected production of more than 400,000oz per annum1 by 2029.

The Robex team has done an outstanding job of developing Kiniero, recently achieving first gold pour on time and budget and now progressing through ramp-up towards commercial production. We are looking forward to the team turning their focus to the development of Bankan post completion of the Transaction, with 2026 shaping up as an exciting year for the combined company to advance its strategy of building a leading West African gold producer.

Why are its shares falling?

There are a few reasons why this could be the case. It could be that some investors hold shares in both companies and are now selling one holding to diversify. Alternatively, some investors may not be a fan of the plan and are exiting positions.

A third reason is that some traders may believe that Robex Resources shares are better value and are selling their Predictive Discovery shares to buy them for exposure to the merger. It is worth highlighting that Robex shares are up 4% on the news.

The post ASX gold stock tumbles on big merger news appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.