M & A Target, page-84

Three months after flagging impending activity at St Barbara Ltd, there appears to be some movement on the western front.

Brokers and investors are banking on a tie-up between St Barbara and Raleigh Finlayson’s Genesis Minerals, with the two understood to finally be getting closer together on valuation after a few rounds of takeover talks.

Fund managers are tipping a scrip-heavy structure, and the slated deal pitched as the dawn of a new WA gold champion.

Genesis, advised by Sternship, is understood to have received a handful of informal approaches from established miners in recent months, all who realise it would make sense to bolt Genesis’ ore into an established mill.

There have been constant rumours in the industry about the ambitious Genesis considering deals with Kin Mining, Dacian Gold, Saturn Metals and Red 5, although it’s understood to have narrowed its thinking to the Macquarie Capital-advised St Barbara.

The big obstacle - as it has been for a while - is St Barbara’s Simberi operations, in Papua New Guinea, which have proved a poison pill for tyrekickers in the past. There’s also some scepticism about its Canadian assets, which perhaps isn’t all that surprising given the parochial nature of WA’s gold sector.

St Barbara shares closed at $1.18 on Tuesday, valuing the group at $1.05 billion including debt. Genesis Minerals, sitting in a net cash position, was worth $350 million.

Just in AFR now