Genesis Minerals and Vault Minerals have agreed to a AU$12.6 billion merger that will create Australia’s third largest gold miner.
Under the terms of the agreement, Vault shareholders will receive 0.7629 new Genesis shares plus 47.5 cents in cash for each share held. This implies a total consideration of AU$5.274 per Vault share and values the company at approximately A$5.6 billion.
The merged entity will create a top-three Australian gold producer with a pro-forma annual output of 600,000 to 700,000 ounces, fully sourced from Western Australia.
The board of Vault has unanimously recommended the transaction to its shareholders, in the absence of a superior proposal. The decision follows the termination of Vault’s previously proposed merger with Regis Resources, triggering a A$50.7 million break fee payable to Regis.
Genesis Executive Chair,Raleigh Finlayson said: “This transaction represents a truly logical combination of assets to create the third largest Australian gold producer, and represents a genuine win-win for all shareholders and stakeholders, unlocking significant unique synergies through the optimisation of complementary assets.”
The combination brings together highly complementary operations in the prolific Leonora-Laverton district, where the companies operate assets within 35 kilometres of each other.
The proximity is expected to unlock unique post-tax synergies estimated at AU$2.0 billion. Key savings include AU$715 million in growth capital expenditure by processing ore from Genesis’s Tower Hill project through Vault’s King of the Hills (KOTH) mill, avoiding the need to build a brand-new processing plant.
Upon implementation of the merger, Genesis shareholders will own approximately 59.8 per cent of the merged entity, with Vault shareholders holding the remaining 40.2 per cent.
The combined group will boast a formidable balance sheet with AU$611 million in net cash and AU$1.4 billion in pro-forma liquidity to fund future growth.
The merged group will be led by Finlayson, with Matt Nixon as CEO and Morgan Ball as CFO. Russell Clark will step in as Non-Executive Chairman, with Tony Kiernan serving as Deputy Chairman.
Vault Managing Director Luke Tonkin added that the transaction delivers a compelling outcome for shareholders, highlighting the strategic value of the company’s Leonora assets.
The scheme booklet is expected to be despatched to Vault shareholders around August or September, with the transaction slated for completion by October or November.
