Introduction
Post-acquiring St Barbara's Leonora assets, Genesis Minerals now sets its sights on consolidating its position by finalizing its acquisition bid for Dacian Gold.
A Background of the Bid
Initiated in mid-2022, Genesis made its first all-scrip bid for Dacian Gold to further its footprint in Western Australia. However, stakeholders such as Kin Mining and its significant German shareholders played a part in the takeover, leading to a standstill.
Genesis's Stance
Having been static at an 80% acquisition since the beginning of the year, Genesis is now resolute in its intent. The new proposition? 0.1685 Genesis shares for each Dacian share, an estimated value of A$286 million or A23.5c per share.
A More Attractive Offer
This new offer is a significant increase from last year's bid of 0.0843 Genesis shares. The stakes rise further to 27c per share (0.1935 shares) if the acquisition crosses the 95% threshold. This revamped bid is a generous 127% premium to Dacian's recent trading figures and a whopping 165% above Genesis's first offer.
Dacian's Response
Dacian's independent directors recognize the offer's value and have signed a bid implementation deed. Major shareholder Ed Eshuys, who holds 1.66% of Dacian, has given his nod to the proposal.
Rationale Behind the Move
Genesis perceives this consolidation as a rational step towards streamlining resource and infrastructure ownership around Leonora. Dacian's independent non-executive chair, Craig McGown, views this as an opportunity for shareholders to tap into the expanded asset scale in the Leonora and Laverton zones.
Key Components of the Deal
An independent expert's report is in the pipeline as part of the acquisition process. Both parties have agreed on a break fee of $570,000 under certain conditions. Should Genesis achieve 90% acquisition, they will initiate compulsory purchase and ponder cash payments.
Potential Game Changers
With a combined 11% stake, Kin and the Delphi Group's decision could potentially tip the scales in favor of Genesis.
Looking Ahead: Consolidation and Production
Genesis has ambitious targets set at over 300,000ozpa annual production. Plans include capitalizing on its Gwalia mill and considering the revival of Dacian's currently dormant Mt Morgan mill. This is alongside developments in the Admiral open pit, the Ulysses underground, and the 1.2Moz Tower deposit.
Market Response
Genesis shares recently traded at $1.40, valuing the company at $1.4 billion. Dacian's stock enjoyed an 84% surge, settling at 23c. Additionally, potential influencer Kin also experienced a 30% rise to 1.2c.
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