Introduction
Genesis Minerals seeks to revive production at the historic Gwalia operation, with MLG Oz playing a pivotal role in supporting its strategic plan in the Leonora region of Western Australia.
Collaboration Details
Although still pending the final execution of contracts, Genesis and MLG have mutually agreed upon the scope of work and commercial terms. Services are slated to commence next month, scaling up progressively in the ensuing months.
Financial Forecast for MLG
This fiscal year anticipates minimal income for MLG Oz, yet projections show a promising increase to $15 million in FY25, followed by a doubling to $30 million in FY26.
A Three-Year Strategy
The initial three-year contract aims to steer Genesis in realizing its "right ores in the right mill" strategy, paving the path toward rejuvenated production.
MLG’s Strategic Involvement
MLG founder, Murray Leahy, reveals that MLG, leveraging its existing assets across the Leonora region, is strategically positioned to assist Genesis in elevating production amidst a unique period of consolidation and growth in processing capacity.
Analyst’s Perspective
Argonaut analyst Ian Christie highlights a sturdy demand for MLG's services and recognizes promising indicators for its potential to enhance earnings, tighten margins, and boost revenues.
Progress at the Mine
Having owned the world’s deepest trucking mine, Gwalia, for a mere few months, Genesis has produced 34,066 ounces in the September quarter, surpassing the full-year guidance of 120,000-130,000oz.
Upcoming Developments
The development of the Admiral open pit and the Ulysses underground are in motion, anticipated to augment Genesis' production to between 180,000 and 200,000oz per annum.
Statement from Genesis Managing Director
Genesis managing director Raleigh Finlayson expressed in August that Gwalia doesn’t necessitate a turnaround but a de-pressurization and cost-cutting of the mine operations.
Future Prospects
With the 1.2Moz Tower Hill deposit regarded as a longer-dated option, Genesis envisions it pairing well with its 80%-owned Mt Morgans mill, as it aims to expand annual production from the Leonora region to a minimum of 300,000oz per annum.
Stock Performance
Shares in Genesis recently traded at $1.36, whereas MLG experienced steady trading at 52, with Christie placing an 85c price target on MLG, surmounting its 52-week high.
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