News: GMD Genesis Minerals On Track To Acquire St Barbara's Leonora Assets, page-8

Thanks for the reply. The question is what constitutes a special deal, and whether the directors would be unwise to push a potential special deal through without minority shareholder approval, particularly given potential conflicts of interest for directors who are linked to GMD.

DCN directors can't just sign up GMD ore without evaluating other options. If DCN changes its position and decides to process outside ore after all, they have to consider all potential ore supplies. GMD has one advantage, in that a deal which is poor for GMD and good for DCN, which is often the way milling deals go, would still indirectly benefit GMD because they own 80% of DCN anyway. But DCN is a long way off paying dividends.

What the DCN directors can't do, in my opinion, is give the kind of deal to GMD they have refused to give to other companies which responded to their call for expressions of interest in milling outside ore. Posters here who think owning 80% of a company is the same as owning 100% are wrong. A deal with GMD which gave GMD defacto ownership would be the definition of the kind of third party deal which would have to go the minority shareholders.

I am not suggesting ASIC would act. I do wonder though if Delphi, who own about 40% of Kin and joined with Kin to buy 10% of DCN, would take derivative action against directors if GMD got a deal which DCN would not give to other companies.

I would personally rather see Leonora rationalisation take place at a resource level with good faith negotiations and fair commercial terms. The fact is GMD failed to takeover DCN. GMD are very good at creating an impression of inevitability, including shared offices with DCN and references to "the group" but they know perfectly well that being a large shareholder is not the same as owning the assets. The DCN directors have to sign up deals good for DCN, and the better DCN does the more expensive the remaining 20% of GMD becomes.