Genesis Minerals Limited · ASX:GMD
Genesis Minerals — Merger or Acquisition (July 2022)
49 slides from Genesis Minerals's merger presentation, Jul 5, 2022
Slide 1: The First Step: Merger with Dacian Gold and Equity Raising
THE FIRST STEP Merger with Dacian Gold and Equity Raising ASX GOLD COMPANY 5th JULY 2022 Not for release to US wire services or distribution in the United States
Slide 2: Disclaimer
Disclaimer Important: You must read the following before continuing. The following notice and disclaimer apply to this presentation (Presentation) and you are therefore advised to read this carefully before reading or making any other use of this Presentation or any information contained in this Pre
Slide 3: Disclaimer: Forward-Looking Statements
Disclaimer Forward-Looking Statements Some statements in this report regarding estimates or future events are forward looking statements. They include indications of, and guidance on, future matters. Forward looking statements include, but are not limited to, statements preceded by words such as “pl
Slide 4: Disclaimer
Disclaimer Disclaimer Neither Canaccord Genuity (Australia) Limited or Euroz Hartleys Group Limited (the Joint Lead Managers) nor any of their or the Company’s respective advisers or any of their respective affiliates, related bodies corporate, directors, officers, partners, employees and agents, ha
Slide 5: Disclaimer: Competent Persons Statements
Disclaimer Competent Persons Statements – Dacian The information in this presentation that relates to Dacian’s Exploration Results is based on information compiled by Mr. Andrew de Joux, a Competent Person who is a member of The Australian Institute of Geoscientists. Mr de Joux is a full-time employ
Slide 6: Overview - Merger and equity raisings
Overview - Merger and equity raisings Recommended off-market takeover bid to acquire Dacian (DCN) for 100% scrip consideration (Offer) Under the Offer, Dacian shareholders to receive 0.0843 Genesis (GMD) shares for each DCN share they hold, representing a premium to Dacian shareholders of1: ~3
Slide 7: A sensible first step
A sensible first step Exclusive focus on the +65Moz Leonora District1: • Creates the central Leonora player with 4.5 Moz2 Resources and growing • Natural pairing of Genesis’ organic growth and high-grade Ulysses project with Dacian’s large-scale mill and exploration upside • Mt Morgans “strategic re
Slide 8: The natural Leonora consolidation
The natural Leonora consolidation Exclusive focus on the world-class Leonora District: • Genesis continues to evaluate numerous regional opportunities, and discussions with St Barbara (SBM) have recommenced and are ongoing • Consolidation offers the potential to create an entity with: A dominant R
Slide 9: On strategy
On strategy Transaction is consistent with Genesis’ vision and five-year strategy: PROJECT MINING AND GEOLOGY AND COSTS / COMMODITY JURISDICTION SCALE VISION M&A STAGE METALLURGY MINE LIFE FINANCIAL Gold Prioritise Advanced >100koz pa Open pit Eastern Target “first “The premium Discipline first - Tr
Slide 10: A genuine win-win
A genuine win-win Benefits to both sets of shareholders: • Accelerated development of GMD’s shovel-ready Ulysses project • Consolidation into one corporate office in Perth1 • Upside potential from further consolidation of the Leonora District2 Benefits to Genesis shareholders: • A$150-160m capex sav
Slide 11: ~A$150-160m capital saving...
~A$150-160m capital saving… …with no additional operating cost1: GMD ore Distance Mill options Milling cost3 G&A3 Haulage2 Total operating cost Capital cost ~100km Mt Morgans mill ~A$22/t ~A$3/t ~A$13/t ~A$38/t Nil Existing 2.9Mtpa Leonora Gold Project Resource 39.3Mt (Genesis) Maiden Reserve expect
Slide 12: Leadership and Governance
Leadership and Governance Combined Board and management, aligned with shareholders1: New team reflects the depth, experience and leadership of both Genesis and Dacian New Board of Directors Intended Board 3:1:1 split between Genesis Genesis:Dacian:Independents2 Tony Kiernan Dacian Non-Executive
Slide 13: People and culture
People and culture PEOPLE AND • Small Company DNA - Everyone is important, everyone impacts value CULTURE Our Core Values drive our • …but THINK BIG; building the capacity for further growth: culture and leadership Proven Leadership Career development opportunities; Multiple pathways / optionality
Slide 14: Core values
Core values Alignment: • Strong alignment across core values and commitments: DACIAN GENESIS Our Core Values drive our culture and leadership • Authentic approach to progressive ESG • Cultivate strong community ties centered around Leonora / Laverton 14
Slide 15: Significant re-rate potential
Significant re-rate potential EV / Resource (A$/oz) EV / Reserve (A$/oz) EV / Production (A$/oz) 0 100 200 300 0 200 400 600 800 1,000 0 2,000 4,000 6,000 8,000 10,000 Capricorn Capricorn Capricorn Bellevue West African Pantoro Perseus "Aussie Leaders" West African Gold Road Bellevue Bellevue "Aussi
Slide 16: Sensible regional consolidation
Sensible regional consolidation Dominant position in the prolific Leonora District1: Leonora gold operations, Western Australia Leonora Resources 84Mt @ 1.7 g/t for 4.5Moz2 Reserves 12Mt @ 1.1 g/t for 436koz2,3 Projects Leonora (GMD), Mt Morgans (DCN) Mining method Underground and open pit Processin
Slide 17: The plan
The plan Long life, +150koz pa base case1,2: • Strategic review of Mt Morgans in December half 2022; potential outcomes include: Process stockpiles, followed by care and maintenance Regional consolidation / operation synergies = Keep milling Re-start mining post a more accommodative cost / lab
Slide 18: Natural pairing of Dacian's large-scale mill...
Natural pairing of Dacian’s large-scale mill… Strategic asset in Leonora ~2.9Mtpa processing plant: • Commissioned March 2018; strategic review in FY23 Looking South-East towards Jupiter open pits • A$172m of capital infrastructure (2016 - 2018)1 • Primary jaw crusher (design 400t per hour) • Coarse
Slide 19: ...with Genesis' organic growth
…with Genesis’ organic growth ORGANIC • Current Resource 39Mt @ 1.6g/t for 2.0Moz (57% Measured and Indicated) GROWTH • Sector leading Resource growth rate - 39% 3-year CAGR (v peers 17%)1 Management KPI’s drive sustainable growth: Total Mineral Resources - Genesis (Moz) Resources growth - WA gold p
Slide 20: Enter Ulysses
Enter Ulysses Strategic asset in Leonora - New high-grade shovel-ready mine: • Shallow ore (from ~50m below surface) Ulysses - Long section • Long-hole open stoping, free milling • Mining Proposal / Works Approval granted • Open along strike and at depth • Next = “Future-proof”, develop, grow: Sma
Slide 21: Jupiter bulk mining opportunity
Jupiter bulk mining opportunity Time to grow, and apply owner-mining open pit model (adjacent to Mt Morgans mill)1: • Brand Saracen - Unique approach to open pit mining: Technical Owner-operator Capital allocation 8-year track record of beating PRIORITY PRIORITY==“SADDLE” “SADDLE” DRILLING g
Slide 22: Outstanding exploration upside
Outstanding exploration upside Multiple high-priority targets, including: • Genesis’ Ulysses to Orient Well Corridor (>40km of highly prospective strike) • Dacian’s Southern Tenement Targets (12km strike), Cedar Island syenite stock1 • Plus Dacian’s +100m thick Callisto structure (7km west of 8Moz W
Slide 23: Resource growth; A lot further to go
Resource growth; A lot further to go Advantage depth v Leonora peers: 0 Ulysses Admiral Orient Well Puzzle Gwalia Darlot KOTH Jupiter Westralia Apollo Hill Cardinia GMD average 2Moz -250 1 1 -500 +2Moz potential Depth of drilling (~mbs) -750 Leonora average -1000 -1250 -1500 -1750 -2000 Note: 1. Ass
Slide 24: Leonora - Robust due diligence
Leonora - Robust due diligence Industry-leading technical experts with significant Leonora-specific operational experience: GMD management (ex-Saracen) Robust, independent MANAGEMENT Previously operated ~1/2 the mines in the Leonora District due diligence process Raleigh Finlayson - MD, Morgan Ball
Slide 25: Equity raising - Overview
Equity raising - Overview A$100m two-tranche placement: Genesis has received firm commitments from institutional and sophisticated investors to raise up to A$100 million via a Two Tranche Placement (“Placement”) comprising of the issue of up to ~83 million new shares (~33% of existing shares on is
Slide 26: Equity raising - Use of funds
Equity raising - Use of funds A$100m two-tranche placement: Use of funds A$m Exploration1 and Ulysses mine development 67.4 Dacian Placement 12.6 Corporate working capital and costs 20 TOTAL 100 Note: 1. 8 drill rigs currently working across combined portfolio - 3x diamond, 4x RC, 1x air-core 26
Slide 27: Merger and equity raising - Timetable
Merger and equity raising - Timetable Indicative timetable: Event Indicative Timing Settlement of Tranche 1 of the Capital Raising 8 July 2022 Completion of the Dacian Placement 12 July 2022 Lodgement of Genesis Bidder's Statement with ASIC and ASX 25 July 2022 Despatch of Genesis Bidder’s Statement
Slide 28: A sensible and rewarding first step
A sensible and rewarding first step • Compelling opportunity to create a leading mid-tier ASX gold producer • Dominant position in the prolific Leonora District1 • High investor appetite for sensible regional consolidation • Natural pairing of Genesis’ organic growth and high-grade Ulysses deposit w
Slide 29: Contact Details
Contact Details: Troy Irvin Corporate Development Officer phone: +61 8 9322 6178 email: investorrelations@genesisminerals.com.au www.genesisminerals.com.au
Slide 30: Appendices
APPENDICES A PRO-FORMA SNAPSHOT B IMPACT IF GENESIS ACQUIRES LESS THAN 100% OF DACIAN C COMBINED MINERAL RESOURCES D COMBINED ORE RESERVES E FUNDING, HEDGE BOOK F PRO FORMA BALANCE SHEET G BID CONDITIONS H KEY RISKS I FOREIGN OFFER JURISDICTIONS J PRODUCTION TARGET MATERIAL ASSUMPTIONS 30
Slide 31: A - Pro-Forma Snapshot
APPENDIX A - PRO-FORMA SNAPSHOT A$100m Capital Genesis Dacian Pro-Forma1 Raising3 Share price / Offer price A$ 1.205 1.205 0.102 1.205 Fully diluted no. shares2 M 269 83 1,095 445 Market Capitalisation A$M 324 100 112 536 % shareholding in MergeCo % 61% 19% 21% 100% Cash and equivalents (31 December
Slide 32: B - Impact if GMD acquires less than 100% of DCN
APPENDIX B - IMPACT IF GMD ACQUIRES LESS THAN 100% OF DCN If GMD acquires greater than 50% of DCN, however does not acquire If at the end of the Offer Period, Genesis has a relevant interest of less greater than 90% than 50% of all DCN shares • Offer is subject to a minimum acceptance condition of 5
Slide 33: C - Combined Mineral Resources
APPENDIX C - COMBINED MINERAL RESOURCES* Measured Indicated Inferred Total Deposit / area Tonnes Tonnes Tonnes Tonnes Grade (g/t Ounces Au g/t Au Oz Au g/t Au Oz Au g/t Au Oz (kt) (kt) (kt) (kt) Au) (koz) Ulysses (High grade)1 658 6.1 129 908 6.3 184 188 8.2 50 1,754 6.4 363 Ulysses (Low Grade)2 137
Slide 34: D - Combined Ore Reserves
APPENDIX D - COMBINED ORE RESERVES1,2 Deposit / area Tonnes (kt) Grade (g/t Au) Ounces (koz) Jupiter open pit 5,558 1.2 216 Westralia underground 492 4.7 74 Mine stockpiles 107 1.0 4 Low grade stockpiles 5,173 0.5 91 Total Mt Morgans 11,330 1.1 385 Hub 135 4.6 20 GTS 355 2.7 31 Total Redcliffe 490 3
Slide 35: E - Hedge Book
APPENDIX E - HEDGE BOOK Dacian Hedge Position (30 June 2022): • 10,500oz • Average price of A$2,667/oz • Delivery between 31 July 2022 - 31 Dec 2022 35
Slide 36: F - Indicative Pro Forma Balance Sheet
APPENDIX F - INDICATIVE PRO FORMA BALANCE SHEET Genesis pro- Genesis pro- Initial stake from forma for 100% Dacian forma for full Genesis Unconditional Conditional Other Balance Sheet (A$m) Dacian Placement unconditional acquisition equity raising and 31-Dec-21 equity raising (1) equity raising (3)
Slide 37: G - Bid Conditions
APPENDIX G - BID CONDITIONS 1. Minimum relevant interest During, or at the end of the Offer Period, Genesis has Relevant Interests in at least 50.1% of Dacian Shares (on a fully diluted basis). 2. No material acquisitions, disposals or new commitments Between the Announcement Date and the end of the
Slide 38: G - Bid Conditions (con't)
APPENDIX G - BID CONDITIONS (con’t) 5. No prescribed occurrences Between the Announcement Date and the date 3 Business Days after the end of the Offer Period, none of the following prescribed occurrences (being the occurrences listed in section 652C of the Corporations Act) happen: (a) Dacian conver
Slide 39: G - Bid Conditions (con't)
APPENDIX G - BID CONDITIONS (con’t) Definitions used in this Appendix H: Announcement Date means the date of the announcement of Genesis’ intention to make the Offer, being 5 July 2022. ASIC means the Australian Securities and Investments Commission. Bidder’s Statement means the statement of Genesis
Slide 40: H - Key Risks
APPENDIX H - KEY RISKS Mining risk and ore reserve and mineral resource estimation risk When compared with many industrial and commercial operations, mining and mineral processing projects are relatively high risk. Each orebody is unique. The nature of mineralisation, the occurrence and grade of the
Slide 41: H - Key Risks
APPENDIX H - KEY RISKS Introduction A number of risks and uncertainties, which are both specific to Genesis and/or Dacian and of a more general nature, or which relate to the Placement or the Offer, may affect the future operating and financial performance of Genesis and/or Dacian and the value of t
Slide 42: H - Key Risks
APPENDIX H - KEY RISKS Operational risks Dacian’s operations, as with any other mining operations, are subject to a number of uncertainties, including in relation to ore tonnes, grade, metallurgical recovery, actual realised values and grades of stockpiles (which are also estimated), ground conditio
Slide 43: H - Key Risks
APPENDIX H - KEY RISKS Liquidity risk Liquidity risk arises from the possibility that the Company might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Company manages this risk through the following mechanisms: preparing forward-
Slide 44: H - Key Risks
APPENDIX H - KEY RISKS Environmental liabilities risk The Company’s activities are subject to potential risks and liabilities associated with the potential pollution of the environment and the necessary disposal of mining waste products resulting from mineral exploration. Insurance against environme
Slide 45: H - Key Risks
APPENDIX H - KEY RISKS COVID-19 Coronavirus disease (COVID-19) continues to impact global economic markets. The nature and extent of the effect of COVID-19 on the performance of the Company remains uncertain. The Company’s Share price may be adversely affected in the short to medium term by the cont
Slide 46: I - Foreign Jurisdictions
APPENDIX I - FOREIGN JURISDICTIONS International Offer Restrictions This document does not constitute an offer of new ordinary shares (New Shares) of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares m
Slide 47: I - Foreign Jurisdictions
APPENDIX I - FOREIGN JURISDICTIONS France This document has not been, and will not be, registered with or approved by any securities regulator in France or elsewhere in the European Union. Accordingly, this document may not be made available, nor may the New Shares be offered for sale, in France exc
Slide 48: I - Foreign Jurisdictions
APPENDIX I - FOREIGN JURISDICTIONS United Kingdom Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act
Slide 49: J - Production Target Material Assumptions
APPENDIX J – PRODUCTION TARGET MATERIAL ASSUMPTIONS LISTING RULE 5.16.1 Pursuant to Listing rule 5.16.1 the Company makes the following representations in respect of the material assumptions made in the 150kOz per annum production target. Mining For the open pit production target, conventional mecha