Genesis Minerals has kept alive its ambitions to consolidate gold mining assets in the Leonora district of WA’s eastern Goldfields with a slight sweetening of the terms of its bid to buy the gold mining assets in the area from St Barbara.
It is the third set of terms for the deal and the second in its current form after the original was blown up by financial and mining problems at St Barbara and its Gwalia mine.
Genesis shares were down 0.4% at $1.25 on Tuesday and St Barbara shares fell 3.8% to 62.5 cents as investors missed out on what could be a small contested bidding situation.
The latest sweetening enabled St Barbara to reject Silver Lake Resources’ $707 million cash and share offer for the gold miner’s Leonora assets.
Silver Lake’s revised bid included A$326 million in cash and 327.1 million shares valued at A$381 million to be issued to St Barbara shareholders.
St Barbara said it would continue to back a $631 million proposal for the same assets from Genesis Minerals (depending on the latter’s share price).
Genesis’ proposal consists of $370 million cash (unchanged from the previous offer),152,826,087 Genesis shares (previously 147,826,087 Genesis shares) and 52,173,913 performance rights (unchanged number but accelerated and converted into Genesis shares issued at completion of the acquisition if St Barbara shareholders approve the transaction on or prior to June 30 this year)
The company also executed a binding agreement with Genesis to amend its offer. Under the deal, Genesis will issue an additional five million shares upfront to St Barbara upon acquiring the Leonora assets.
St Barbara will end up owning 19.9% of Genesis
Genesis has also agreed to pay St Barbara a cash deposit of $25 million to be held in escrow. This deposit is non-refundable in certain circumstances.
The Leonora assets involved in the deal include the troubled Gwalia underground mine and processing plant and nearby development prospects.
In its statement, St Barbara cited a lack of synergies in rejecting gold producer Silver Lake’s revised off for the Leonora assets and said it did not deliver sufficient cash to the company to meet its future liquidity requirements.
“In St Barbara’s view, Silver Lake has not provided any reasonable or quantitative assumptions to support its proposed consideration which could otherwise be confirmed via due diligence,” St Barbara directors said.
