Australian producers Genesis Minerals and Vault Minerals have agreed to merge by means of a Vault scheme of arrangement under which Genesis will acquire 100% of the fully paid ordinary shares in Vault. The deal will create a top-three Australian gold producer with 600,000–700,000 ounces of immediate annual gold production and a pro-foma market capitalisation of around A$12.6 billion.
The aggregate cash and scrip consideration under the scheme will be A$500 million and 803.4 million Genesis Shares, respectively. Upon implementation, Genesis shareholders would own 59.8% of the merged group, and Vault shareholders would own the remaining 40.2% (each on a fully diluted basis).
“This transaction represents a truly logical combination of assets to create the third largest Australian gold producer, and represents a genuine win-win for all shareholders and stakeholders, unlocking significant unique synergies through the optimisation of complementary assets. We are creating a strong platform for continued growth and shareholder returns,” Genesis Executive Chair Raleigh Finlayson said.
The Genesis deal concludes a bidding war for Vault. In May, Vault announced a proposed merger with Regis Resources, potentially creating an A$10.7 billion combined company. Genesis’s rival bid was deemed the “superior proposal,” and now Vault will pay Regis a break fee of about A$50.7 million after walking away from their agreement.
Genesis and Vault expect about A$2 billion in potential post-tax synergies over 10 years, including A$1.5 billion from combining operations in the Leonora and Bardoc-Mount Monger areas. Vault’s Leonora operations comprise the King of the Hills (KOTH) open-pit and underground mines, the Darlot satellite underground mine, and the KOTH processing facility.
Current Vault board member Russell Clark will be appointed as non-executive chairman of the merged group, with current Genesis executive chair Raleigh Finlayson to be managing director, and Genesis’ Matt Nixon and Morgan Ball to remain as chief executive officer and chief financial officer, respectively. The merged group will have a board comprising four Genesis directors and three Vault directors.
Source: Genesis Minerals