Genesis Minerals has launched a takeover bid for Mineral Resources in a deal worth about AU$639 million, significantly expanding Genesis’ presence on Laverton’s emerging Chatterbox Trend in Western Australia.
Under the terms of the binding scheme of implementation, Magnetic shareholders will receive AU$1.40 cash and 0.0873 New Genesis shares for each Magnetic share they own.
Completion of the scheme is expected in June, subject to regulatory and shareholder approvals. The board of Magnetic gave its unanimous support for the scheme and recommended that shareholders vote in favour.
Genesis said the Magnetic’s Lady Julie gold project, which hosts a mineral resource of about 2.2 million ounces at a grade of 1.8 grams per tonne, is in proximity to Genesis’ operating Laverton mill, offering it a clear pathway to supply incremental open-pit and underground ore to the mill.
More importantly, Lady Julie’s northern boundary borders the land acquired by Genesis through its recent acquisition of the Laverton gold project, meaning there is scope of substantial synergies and cost savings by allowing Lady Julie to integrate into a much larger open pit operation.
Genesis Executive Chair Raleigh Finlayson said: “This transaction creates substantial value for both groups of shareholders, delivering genuine synergies while combining the right assets with the right people.
“Magnetic’s Lady Julie gold project will add more than two million ounces at an attractive high grade to Genesis’ Laverton inventory, further bolstering the mine life and production outlook.”
The acquisition expands Genesis’ Laverton footprint and its mineral resources to 8.4 million ounces, an increase of 40 per cent.
Magnetic Resources Managing Director George Sakalidis said the deal followed a strategic review “to explore potential options to collaborate with other operators which have the existing skill set or combination synergies to develop Magnetic’s discoveries and unlock value for our shareholders”.
“This proposal provides an opportunity for shareholders to realise an attractive premium, with the flexibility to accept cash or shares in Genesis,” Sakalidis added.
“Exchanging Magnetic shares for Genesis shares will enable Magnetic shareholders to retain exposure to Lady Julie with the benefit of Genesis’ best-in-class project development team, diversified operating cash flow and robust balance sheet.”
