SYDNEY, AUSTRALIA: Dacian Gold Limited announced the proposed merger of Dacian and Genesis
Minerals Limited by way of a unanimously recommended off-market takeover bid by Genesis for all
of the fully paid ordinary shares in Dacian (Dacian Shares) (Offer).
Under the Offer, subject to the satisfaction or waiver of the conditions set out in Annexure A to this announcement, Dacian Shareholders will be entitled to receive 0.0843 fully paid ordinary shares in Genesis (Genesis Shares) for every Dacian Share held.
The Offer Consideration represents a premium of:
• 33% to the 5-day volume weighted average price (VWAP) of Dacian Shares of $0.082 and Genesis Shares of $1.296 on and inclusive of 1 July 2022 (being the last trading day before Dacian and Genesis entered a trading halt)
• 28% to the 10-day VWAP of Dacian Shares of $0.087 and Genesis Shares of $1.326 on and inclusive of 1 July 2022
The Offer extends to all Dacian Shares currently on issue, and those issued during the Offer period as a result of the exercise of currently issued options or performance rights. Based on Genesis’ last closing price of $1.205 on 1 July 2022, the implied value of the Offer Consideration is $0.102 per Dacian Share which values Dacian at approximately $111 million.
On a pro forma basis, Dacian shareholders will own approximately 25.5% of the combined entity (based on the fully diluted issued capital as of the date of this announcement and prior to the Genesis Capital Raising and Dacian Placement).
Genesis is an advanced ASX gold explorer and developer in the Leonora region with a March 2022 Mineral Resource of 39.3Mt @ 1.6g/t for 2.0Moz Au. The Mineral Resource includes one of the highest-grade ore sources in the region, with a high-grade portion at Ulysses of 1.8Mt @ 6.4g/t for 363koz Au. Genesis has significant upside with all deposits remaining open along strike and at depth, and limited deeper drilling completed across entire belt.
Genesis is led by a highly experienced board and management team including former Saracen Minerals executives Raleigh Finlayson (Managing Director), Morgan Ball (CFO), Lee Stephens (Operations) and Troy Irvin (Corporate Development).
Subject to Genesis obtaining a relevant interest in more than 50% of the Dacian Shares on issue and the Offer becoming unconditional, current Dacian Non-Executive Chair, Mick Wilkes, will join the Genesis Board as a Non-Executive Director.
It is planned that Dacian’s Chief Executive Officer Dale Richards will join the merged group as Chief Geologist.
Dacian believes there is strong strategic logic in the combination of Genesis and Dacian’s assets. The merger would effect a consolidation of nearby high-grade Resources with existing infrastructure, and create a new mid-cap ASX-listed gold company with enviable strategic optionality, including further regional consolidation opportunities.
The merged group would be well-capitalised, have a clear pathway to production as well as other strategic options, given existing infrastructure, enhanced scale of Resources, exploration upside and a robust balance sheet. Should the Offer be successful, the merged group intends to focus on exploration work to grow Resources at Genesis and Dacian’s assets in the Tier 1 Leonora-Laverton region, and to work to re-define a robust life of mine plan for the combined operations.
Dacian’s Non-Executive Chair, Mick Wilkes, said: “This transaction represents a compelling opportunity to combine two highly complementary businesses to create a company with significant Mineral Resources, established infrastructure and exploration upside in the Leonora-Laverton region.
Importantly, Genesis’ concurrent $100 million equity raising will ensure the combined entity is well-capitalised to pursue its growth strategy and define a pathway to production under an integrated operating model.
Since pouring first gold in March 2018, Dacian has produced over 500,000 ounces from its Mt Morgans operations, yet has continued to face operational challenges in the current environment that led to a review of the operating strategy in June 2022 and the decision to suspend mining activities. The Company is transitioning to processing low-grade ROM stockpiles and will continue to focus on expanding the Mineral Resources at Jupiter based on the recently announced drilling results.
This transaction secures the Company’s promising future, provides capital to conduct and accelerate our extensive drilling campaign to test the potential for a large-scale, open-pit mining operation at Jupiter and allows Dacian shareholders to benefit from the significant potential regional consolidation opportunities on offer as shareholders in the enlarged Genesis entity.”
