Commodities, Finance, Gold, News

Genesis and St Barbara ‘patient’ on Leonora deal

Genesis St Barbara

Recently announcing its acquisition of Dacian Gold, Genesis Minerals is taking a cautious approach to further consolidation in Leonora, including its discussions with St Barbara.

Speaking at the Diggers & Dealers conference in Kalgoorlie, Genesis managing director Raleigh Finlayson said deal talks with St Barbara were continuing but refrained from going into much more detail.

“Having done extensive DD (due diligence) on each other’s assets, we can see operational synergies that can pair the right rocks with the right mills, the right skills with the right minds and provide operational levers to de-risk assets to the benefit of shareholders,” he said.

Finlayson said the two companies were exploring ways of “differing but ultimately eliminate material capex (capital expenditure)” in an inflationary cost environment not seen since the 1980s.

The underlining theme to Finlayson’s message was that the company had the resources to progress discussions at its own pace.

“We have time and capital, we’ve got over $100 million in our bank accounts and if we take into consideration the money options, that’s $150 million of money on our balance sheet,” Finlayson said.

“We have optionality as I’ve articulated, but really clearly, we’ll remain patient and disciplined on our overarching five-year strategy which we’re only four months into.

“We have a clear mandate from our shareholders in the market to deliver our growth ambitions under the stewardship of a management team who have done it all before.”

St Barbara was also represented at Diggers & Dealers, with the company’s chief financial officer Lucas Welsh making a presentation.

Welsh didn’t mention anything specifically about St Barbara’s ongoing discussions with Genesis, but he did highlight the company’s significant landholding and presence in the Leonora region, suggesting it would be central to any consolidation in this gold mining district.

“We have the largest mineral resource and ore reserve endowment in the region,” he said.

“So that places us in very good stead for the longevity of the mines we have and it’s not only what we have, but it’s also what we potentially might have going forward ­­– we do have some near-term resource and reserve growth coming out.”

In April 2022, St Barbara completed its acquisition of Bardoc Gold, adding the advanced Zoroastrian and Aphrodite underground deposits to its portfolio and further bolstering the company’s Leonora footprint.

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