Finlayson’s Genesis Minerals looks to Dacian tie-up amid tough times in gold mining

Tough times in the WA gold industry have opened up the prospect of a new wave of consolidation, with Genesis Resources said to be in talks with struggling miner Dacian Gold.

Genesis Resources is said to be in talks with struggling miner Dacian Gold over a scrip bid for the company.

Tough times in the WA gold industry have opened up the prospect of a new wave of consolidation, with Genesis Resources said to be in talks with struggling miner Dacian Gold over a scrip bid for the company.

Dacian last month suspended mining at the open pit at its Mt Morgans hub east of Leonora, with the company now believed to be in talks with Raleigh Finlayson’s Genesis about a potential tie-up between the companies.

Genesis’ 2 million ounce Leonora gold project sits within striking distance of Dacian’s mill, and the former market darling has struggled for a consistent source of feed for its plant since it struck major troubles in 2019.

It is not the first time Genesis has been linked to a possible move on Dacian, with Mr Finlayson – former boss of Saracen Mineral Resources – having considered multiple options to consolidate the rich gold ground around Leonora.

Saracen merged with Northern Star Resources in a blockbuster $16bn deal that reunified ownership of the Kalgoorlie Super Pit.

Raleigh Finlayson. Picture: Colin Murty

Genesis is also known to have considered a potential tie-up with St Barbara, which operates the historic Gwalia mine just outside Leonora, but was put off by St Barbara’s Papua New Guinea and Canadian assets.

But with St Barbara having recently said it was considering a sale of its Simberi mine in PNG, and that its $850m Atlantic Gold assets also facing the prospect of closure or sale, a broader regional consolidation play could be on the horizon for Genesis.

Dacian is worth only $89m on the market, but Genesis – which had $20.4m cash at the end of March – would potentially need to raise upwards of $100m from shareholders to give itself additional leeway as it considered its options for the future of Dacian’s assets.

Dacian had $17m cash at hand and only $2m in debt when it told shareholders on June 17 it was planning to mothball its main mining pit at Mt Morgans, with further development at its underground mine to wind down in the September quarter.

Dacian shares last traded at 9.3c, with Genesis last changing hands for $1.205, giving the company a market capitalisation of $319m.