Rumour mill in overdrive on Genesis move for Dacian Gold

Genesis has a two million ounce resource gold inventory at its Leonora exploration projects. Picture: iStock

Genesis Minerals boss Raleigh Finlayson titled his most recent corporate presentation “Open for business”, but the question floating around Perth’s mining community is not around which business, but when the company will announce a tie-up with Dacian Gold.

A likely deal between the two has been the hot topic of talk in WA since Finlayson – the former managing director of Saracen Mineral Holdings that took the company into its mega-merger with Northern Star Resources – recruited two former comrades to join his new company.

Genesis announced the appointment of former Saracen and Northern Star finance boss Morgan Ball last week, along with former Saracen mine manager Lee Stephens.

Genesis has a two million ounce resource inventory at its Leonora exploration projects, but the two new recruits – like Finlayson – are both well credentialed miners, not explorers.

That suggests they’ve been brought on board with a specific mission in mind, with Dacian tipped as the most likely target.

Dacian boss Leigh Junk has been with the company for two years, having been brought in to rescue it from a disastrous patch in 2019 when its previous predictions about the quality of its deposits turned out to be a trifle optimistic and Dacian was forced into a procession of production downgrades.

While Dacian is in a better place than it was two years ago, it booked a $42.9m loss for the first half of the year and is still hunting for quality feed for its Mt Morgans gold plant.

Oddly enough, Mt Morgans is about 100km from Leonora, broadly within trucking distance of Genesis’ deposits.

Junk and Finlayson are close, and Junk’s previous role involved kicking Doray Gold into shape and then selling the company to Silver Lake Resources – suggesting a similar move is likely at Dacian.

Adding feed to the rumour mill is that Genesis’s market value is just under twice that of Dacian. And one of Dacian’s biggest shareholders, DGO Gold, is currently in play courtesy of a friendly $308m bid from Gold Road, suggesting a 6.8 per cent stake in Dacian could be easily shaken loose in the washout of the takeover.

Taken all together, it’s small wonder the West Perth rumour mill is running in overdrive.