Both companies have also mutually terminated the scheme implementation deed announced in December 2022 under which St Barbara was to acquire Genesis Minerals
Genesis Minerals to acquire Leonora assets from St Barbara. (Credit: Albert Hyseni on Unsplash)
Australian gold miner St Barbara has agreed to divest its Leonora assets in Western Australia to rival Genesis Minerals in a deal worth A$600m ($402m).
The Leonora assets involved in the deal include the Gwalia, Tower Hill, and Zoroastrian, and Aphrodite projects.
Both companies have also mutually terminated the previously announced scheme implementation deed.
Under the scheme implementation deed announced in December 2022, St Barbara agreed to acquire Genesis Minerals and demerge its Atlantic gold operations in Canada, the Simberi gold mine in Papua New Guinea, and other assets in Australia to its shareholders.
The agreement has been terminated primarily due to the material increase in funding requirements.
According to the terms of the new deal, Genesis Minerals will pay an upfront cash of A$370m ($248m) along with issuing 147.8 million of its shares worth A$170m ($114m) to St Barbara.
Besides, Genesis Minerals will issue an additional 52.2 million shares worth A$60m ($40.2m) upon achieving the first production at the Tower Hill project.
Upon the completion of the deal, St Barbara shareholders will collectively have an economic exposure of up to nearly 19.5% of Genesis Minerals. St Barbara will also eliminate all its senior debt and lease liabilities following the deal.
St Barbara chair Tim Netscher said: “The Board believes the Transaction value from the sale of the Leonora assets represents fair value for our shareholders, who will now own a well-capitalised, debt-free business, with a portfolio that has significant potential, and the people and resources in place to realise its true potential.
“Simberi and Atlantic have combined 5.9Moz in Mineral Resources and 3.5Moz in Ore Reserves and provide a solid foundation for the business. The Company has a clear strategy in place to maximise the value of those assets going forward.”
For Genesis Minerals, the deal helps consolidate St Barbara’s Leonora assets and the company’s neighbouring assets, which include the new Ulysses mine.
Genesis Minerals managing director Raleigh Finlayson, said: “The acquisition of St Barbara’s Leonora assets will position Genesis as a gold industry leader with a dominant position in Western Australia’s world-class Leonora District.
“Investors are demanding sensible regional consolidation, and this deal hits the spot, targeting long-life production growth to 300,000 ounces per annum1 exclusively from Leonora.
“We look forward to integrating the assets and unlocking the significant synergies available in Leonora. For example, Genesis’ nearby Ulysses mine will deliver unique value at Gwalia, providing Gwalia with a new lease of life by enabling a focused ‘margin over ounces’ business plan.”
Subject to approval from St Barbara and Genesis Minerals’ shareholders, regulatory approvals, and customary conditions, the transaction is expected to be complete by 30 June 2023.