Gold, News, Takeover bids

Genesis assumes control of Leonora

St Barbara has navigated the storms of the past year to achieve FY22 guidance and deliver a respectable underlying profit.

A recent $600 million agreement between gold miners Genesis Minerals and St Barbara will see Genesis assume control of St Barbara’s Leonora operation.

The Leonora operation, located in Western Australia, consists of the Gwalia underground mine and processing plant as well as nearby development opportunities.

Under the agreement, Genesis will pay St Barbara $370 million in cash upfront, with the remaining amount contingent on Tower Hill, located at Gwalia, reaching first production.

“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,” Genesis managing director Raleigh Finlayson said.

“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.”

In a statement announcing the agreement, Genesis said the purchase is a strategic acquisition as the company’s new Ulysses mine is located close to the Leonora operation.

“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,” Finlayson said.

“Shareholders will ultimately reap the long-term benefits of more production at lower cost and lower risk from this prolific mining district.”

The purchase has been unanimously recommended by the Genesis board, subject to no superior proposal emerging.

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