from The Australian 14 April 23.St Barbara and Genesis Minerals...

from The Australian 14 April 23.

St Barbara and Genesis Minerals ditch merger, shift to sale of Gwalia and Leonora gold projects

Genesis Minerals will pay $600m to buy St Barbara’s Leonora district assets in WA in a cash and scrip deal, as part of a recut agreement to consolidate the rich WA gold district.

Genesis hit the market with a $450m raising on Friday, looking for a cash injection at $1.15 – a premium to its $1.10 last trading price, after a week of negotiations to restructure its agreement with struggling St Barbara over a way to make the consolidation of the Leonora district work.

Rather than a reverse takeover of Genesis and a spin out of St Barbara’s Papua New Guinea and Canadian assets, the new deal will see Genesis offer cash and shares to St Barbara to buy the company’s Gwalia mine and other nearby gold deposits.

St Barbara has agreed to accept:-
upfront cash of $370m,
Genesis scrip worth $170m at $1.15 a share,
with an additional $60m worth Genesis shares due when satellite deposit Tower Hill first produces ore.

In total, that would give St Barbara about 20 per cent of Genesis shares, well down from the 38 per cent of the merged company envisaged in the first version of the agreement.

But the cash component would be enough to rid St Barbara of its debt problems, and cash to pursue the further development of its PNG and Canadian assets.

Genesis will raise the cash in two parts, through an accelerated $50m placement, and then a second tranche of $400m if shareholders of both companies approve the deal.