Silver Lake Resources Limited has announced that it submitted a revised indicative proposal to acquire St Barbara Limited‘s Leonora assets.
The new proposal includes a consideration of $707 million, which consists of $326 million in cash and 327.1 million shares valued at $381 million.
The revised proposal directly addresses various concerns of the St Barbara board with respect to Silver Lake’s previous proposal, which includes the perception that St Barbara would have significantly less cash to fund its obligations and capital requirements compared to the agreement entered into with Genesis Minerals Limited for the sale of the Leonora assets to Genesis.
It also addresses the requirement for Silver Lake to obtain an independent expert’s report in connection with the Silver Lake shareholder meeting required to approve the proposed transaction, which created additional risks in terms of the expert subsequently confirming the proposed transaction to be fair and responsible to Silver Lake shareholders.
In the new proposal, St Barbara will retain approximately 7.5% of 94.8 million of Silver Lake’s issued shares upon the completion of the proposed transaction, which provides it with $111 million in additional liquid assets to fund its working capital requirements following the completion of the transaction.
Silver Lake Managing Director Luke Tonkin said the total consideration remains 27% higher than the consideration being offered by Genesis and provides St Barbara shareholders with significant exposure to a mid-tier gold producer that has a diversified portfolio of production, expansion, development and exploration assets.
“We’ve listened to the concerns of the St Barbara board aired publicly about our original non-binding proposal to buy the Leonora assets and have addressed them,” he added.
Tonkin noted that by separating the issuance of the Silver Lake scrip component to St Barbara and its shareholders, we have shortened the time to completion and increased the liquidity available to St Barbara.
