Gold miner Genesis Minerals said it was in talks with larger rival St Barbara Ltd to consolidate operations in the Leonora district of resource-rich Western Australia.
A potential combination would give Genesis control of St Barbara’s prized Gwalia gold mine in Leonora, which is about 830 kilometres (515.7 miles) from Perth, the capital of Western Australia. The region made up more than half of St Barbara’s profit in fiscal 2021.
St Barbara had a market capitalization of A$585.4 million ($403.05 million) as of Monday’s close, per Refinitiv data.
Genesis, however, warned that there was no certainty the talks would lead to a deal. St Barbara had confirmed the discussions on Monday.
Genesis also said it would buy smaller peer Dacian Gold for A$111 million to create a group with about 4.5 million ounces in resources exclusively in Leonora.
Under the all-scrip deal, Genesis will offer 0.0843 of its share for each Dacian share, implying an offer price of A$0.102 per share, a premium of 10.9% to Dacian’s last close.
Genesis said it would raise A$100 million to fund its Ulysses gold project as well as exploration activities after the acquisition of Dacian.
Source: Reuters.com