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Wednesday, August 10, 2022

Diggers and Dealers Special: GENESIS MINERALS URGES CAUTION ON PROSPECTS FOR A NEW LEONORA GOLD CONSOLIDATION.

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“The “win-win” proposition would accelerate development of Ulysses’ high-grade core of 363,000oz @ 6.4g/t while avoiding the $A150-160 million cost of establishing a stand-alone processing facility, with further potential to increase production rates.”

Raleigh Finlayson,
Managing Director ,
Genesis Minerals.

The Western Australian mining sector may be agog with the prospect of what is quickly being tagged as the “Leonora consolidation” but the man who started the trend, Genesis Minerals managing director Raleigh Finlayson, has cautioned that it is not a sure thing. The agreed $A111 million takeover agreement announced this month between explorer Genesis and miner Dacian Gold ensured that Finlayson’s presentation attracted the biggest audience on the opening morning of the prestigious Diggers & Dealers Mining Forum in Kalgoorlie today.

Genesis, a company established with a clear strategy of using mergers and acquisitions to achieve its aim to become a premium Australian gold producer, sees a natural pairing with Dacian in the world-class Leonora mining district. The all-scrip transaction would combine its own high-grade Ulysses project and organic growth opportunities with Dacian’s large-scale strategic milling infrastructure at the Mt Morgans project.

The “win-win” proposition would accelerate development of Ulysses’ high-grade core of 363,000oz @ 6.4g/t while avoiding the $A150-160 million cost of establishing a stand-alone processing facility, with further potential to increase production rates.

The transaction drew immediate attention to the potential of more mergers and acquisitions activity in the Leonora district, with its long and rich mining history involving multiple players and extensive infrastructure. Most of the speculation focused on St Barbara, which holds significant resources and infrastructure in the region, as the company’s likely next target.

A combination of the companies would deliver the size and quality of assets to bridge the gap between the individual units with the ASX100 status miners.

Finlayson acknowledged Genesis had reopened discussions with St Barbara, among numerous regional opportunities. A further consolidation would offer the potential to hold a dominant resource and reserve position in Leonora coupled with the flexibility of optimized deposits and regional processing power, he said.

While St Barbara itself has also talked about the prospects for consolidation in the region, Finlayson warned there were no assurances the current talks would lead to a transaction.

 

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