The long-awaited merger of gold companies St Barbara and Genesis Minerals has occurred, with the new entity to be called Hoover House.
St Barbara will acquire 100 per cent of the shares in Genesis via a scheme of arrangement to create the new gold house, with each Genesis shareholder to receive 2.0338 St Barbara shares for each Genesis share as part of the transaction.
Genesis shareholders will own 41 per cent of Hoover House, while St Barbara shareholders will own 38 per cent of the combined entity.
St Barbara has also moved to de-merge its Atlantic, Simberi and other assets (including St Barbara’s shares in various ASX-listed entities) to St Barbara shareholders in conjunction with the merger. The new company will be called Phoenician Metals and aims to list on the ASX.
This means Hoover House will be focused exclusively on the Leonora gold district with which St Barbara and Genesis both hold assets. The new entity will have a production target of more than 300,000 ounces (oz) of gold per annum, compared to St Barbara’s 2022–23 financial year (FY23) production guidance of 145,000–160,000oz per annum.
St Barbara had produced 56,000oz of gold in FY23 up to November 30.
Genesis has launched a $275 million capital raising to fund the merger, comprising approximately 229.2 million new Genesis shares at $1.20 per share. This will be subject to Genesis shareholder approval and the Hoover House merger and Phoenician Metals de-merger becoming effective.
The merger will result in Raleigh Finlayson being appointed managing director and chief executive officer of Hoover House, with Tony Kiernan to be appointed as chair. The Hoover House board will comprise four St Barbara directors, two Genesis directors and one new board member.
St Barbara chair Tim Netscher said the transaction was a sensible move for both parties.
“The merger with our Leonora neighbour Genesis to create Hoover House will accelerate our Leonora Province Plan,” he said. “Shareholders will reap the benefits of more production at lower cost and lower risk from this prolific mining district.
“A significant component of the value delivered by the creation of Hoover House is the unique synergies delivered by the resultant combination of assets, such as the ability to sensibly stage the development of the various orebodies and to match one party’s ore to the other party’s mill capacity.”
Current Genesis managing director Raleigh Finlayson said the merger formed part of Genesis’ overarching strategy.
“This merger is a major step forward in the strategic journey Genesis embarked on less than 12 months ago,” he said. “By combining with St Barbara we are creating Hoover House, the premium Australian gold company we envisaged, with sustainable, high-quality production.
“The close proximity of the combined company’s core Leonora assets, the ability to unlock substantial synergies and the clear path to a market re-rate makes this the right deal for both Genesis and St Barbara shareholders.”
Rumours have been swirling around potential M&A discussions between Genesis and St Barbara, with Genesis confirming as such in early June.
Genesis launched an off-market takeover of Dacian Gold in July, and declared the takeover offer unconditional in mid-September. The offer has been extended to January 16 2023, with Genesis currently holding 77 per cent of Dacian shares.