Genesis Minerals (ASX:GMD) to merge with Dacian Gold (ASX:DCN) via tender offer – The Market Herald



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  • Genesis Minerals (GMD) is set to acquire Dacian Gold (DCN), another ASX-listed materials stock, through an off-market conditional tender offer with an implied value of $111 million. dollars.
  • Genesis Minerals believes the merger with Dacian Gold would consolidate their high-grade resources and provide a clear path to becoming a mid-cap Australian gold mining company
  • Genesis raises $100 million to fund exploration and a placement with Dacian which, combined with a pre-bid acceptance agreement with one of its shareholders, gives GMD a 16.6% voting right in Dacian
  • Tender offer requires at least 50.1% votes in favor and Dacian directors intend to recommend that shareholders accept the offer
  • GMD shares are trading up 2.90% at $1.24 and DCN is up 4.35% and trading at 9.6 cents per share as of 3:44 p.m. AEST

Genesis Minerals (GMD) plans to acquire Dacian Gold (DCN), another ASX-listed materials stock, for an implied value of $111 million.

The acquisition will take the form of a unanimously recommended off-market conditional tender offer which will require a favorable vote of at least 50.1%.

Dacian shareholders will be entitled to receive 0.0843 GMD share for each DCN share they each hold.

Based on Genesis’ last closing price on July 1 of $1.21, the implied value of the offer consideration is 10.2 cents per Dacian share. This exchange ratio represents a 33% premium to the companies’ five-day volume-weighted average price (VWAP) and a 28% premium to the 10-day VWAP.

Both companies have gold assets in Western Australia, with Genesis owning the Barimaia operations and Leonora and Dacian owning the Mt Morgans operation.

Genesis Minerals believes there is “strong strategic logic” in combining its assets with Dacian Gold, as it would consolidate high-grade resources with existing infrastructure and give the combined companies a clear path to becoming an Australian gold miner in mid cap.

The combined group would have approximately 4.5 million ounces of resources in the “world-class” Leonora district, as well as the financial capability, experience and expertise to expand mineral resources and maximize value.

“This transaction is the first step towards our vision to build Australia’s first gold mine, targeting +300,000 ounces per year of sustainable, high quality gold production,” said GMD Managing Director Raleigh Finlayson.

“The complementary nature of the combined company’s significant resources and infrastructure, exploration benefits and other regional growth opportunities make it the right deal for Genesis and Dacian shareholders,” he added.

Increase in capital

Genesis Minerals has also received firm commitments to raise up to $100 million through a two-tranche placement. A total of 83 million shares will be issued to institutional and professional investors at $1.21 per share.

The funds will go towards the development of the Ulysse project and the exploration of the combined group’s assets, working capital and $12.6 million will go to the Dacian investment.

Under the placement agreement with Dacian Gold, Genesis will subscribe for approximately 123.9 million DCN shares for $12.6 million. This will result in Genesis acquiring a 10.2% stake in Dacian, giving it a 10.2% voting right in the tender offer.

This placement will be completed by a binding pre-offer acceptance agreement with a Dacian shareholder, Perennial Value Management, for approximately 76.4 million DCN shares. This will give Genesis 7% voting power for a total voting power of about 16.6% in Dacian.

As things stand, the directors of Dacian intend to recommend that shareholders accept the offer.

GMD shares were trading up 2.90% at $1.24 and DCN was up 4.35% and trading at 9.6 cents per share as of 3:44 p.m. AEST.


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