According to Genesis, the amendments were made so that the consideration would be:
- A$370 million cash (unchanged)
- 152,826,087 Genesis shares (formerly 147,826,087 Genesis shares)
- 52,173,913 performance rights
Genesis added that St Barbara’s goal remains to transfer substantially, if not all, the Genesis consideration shares to St Barbara shareholders via a return of capital post-transaction, subject to shareholder approval.
Genesis has also agreed to make a cash deposit of A$25 million (Cash Deposit) to St Barbara, which will be kept in escrow. In some cases, the Cash Deposit is non-refundable.
In the absence of a superior proposal, the St Barbara Board of Directors continues to unanimously approve the Genesis Transaction.
Genesis’ announced “Open for business” approach is congruent with the acquisition of St Barbara’s Leonora properties. According to the company, Genesis will be a top ASX gold house focused only on the rich Leonora District in Western Australia, with annual output increasing to a sustainable +300,000 ounces.
St Barbara and Genesis collaborated for a year to assess the considerable unique synergies that may be realised by uniting St Barbara’s and Genesis’ adjoining Leonora assets. These include:
- Pairing of Genesis’ new Ulysses mine with St Barbara’s Gwalia mine – Fills St Barbara’s underutilised Leonora mill (reducing unit milling cost) and allows Gwalia to pursue a lower-cost “quality over quantity” mining strategy. Ulysses is under construction and on pace to begin underground mining in the third quarter of 2023.
- Addition of Genesis’ new Admiral mine – Fills St. Barbara’s underutilised Leonora mill (reducing unit milling cost); open pit mining is scheduled to begin at Admiral in the third quarter of 2023, employing Genesis Mining Services (GMS, Genesis’ in-house open pit mining contractor).
- Pairing of the Mt Morgan mill and GMS with St Barbara’s Tower Hill Project – Tower Hill development is accelerated by providing a milling solution (which eliminates capital) and owner-operator open pit mining capacity (which reduces operational costs and execution risk).
- Deferral or elimination of A$400 million of capital expenditure – Lowering the risk of near-term execution and financial needs.
As previously stated, a maiden Reserve estimate for Genesis’ Leonora Gold Project, which includes Ulysses and Admiral, is on schedule for the current June quarter of 2023.
The acquisition remains scheduled to close on 30 June 2023.
Following completion, Genesis will be fully financed (pro-forma cash A$175 million, no debt) to invest appropriately in Leonora and provide shareholders with the long-term advantages of increased production at lower cost and risk.