Genesis Minerals Limited has announced a recommended scheme to acquire Magnetic Resources NL, bringing a high-grade 2.2 million ounce gold resource near its Laverton mill and offering Magnetic shareholders a compelling premium with a mix of cash and shares.
- Genesis proposes to acquire 100% of Magnetic Resources via scheme of arrangement
- Adds ~2.2Moz gold resource at Lady Julie Gold Project near Laverton mill
- Scheme consideration – A$1.40 cash plus 0.0873 Genesis shares per Magnetic share
- Premium of 25-35% to Magnetic’s recent trading prices
- Completion expected June 2026, subject to approvals and shareholder vote
Genesis Expands Gold Footprint with Magnetic Acquisition
Genesis Minerals Limited (ASX, GMD) has taken a significant step to bolster its gold production and resource base by entering into a binding agreement to acquire Magnetic Resources NL (ASX, MAU). The proposed acquisition, structured as a scheme of arrangement, will see Genesis take full ownership of Magnetic, adding a substantial 2.2 million ounce high-grade gold resource at the Lady Julie Gold Project, located just 20 kilometres from Genesis’ existing Laverton mill.
This strategic move not only increases Genesis’ Mineral Resources to a pro forma 21 million ounces but also promises operational synergies by integrating Lady Julie’s deposits with Genesis’ recently acquired Laverton Gold Project. The proximity of these assets offers potential cost savings through a unified open pit operation and leverages Genesis’ established processing infrastructure and mining expertise.
Attractive Premium and Flexible Consideration for Magnetic Shareholders
Magnetic shareholders are set to receive a combination of A$1.40 cash and 0.0873 fully paid Genesis shares for each Magnetic share held, representing a total implied value of approximately A$2.00 per share. This equates to a premium of 25% over Magnetic’s last closing price and 35% over its 30-day volume weighted average price, delivering immediate and certain value. Shareholders also have the option to elect to receive the consideration wholly in cash or wholly in shares, subject to scale-back mechanisms.
The cash component will be funded from Genesis’ strong liquidity position, which includes A$465 million in cash and equivalents and an undrawn A$225 million corporate revolving cash advance facility. This structure balances reducing dilution for Genesis shareholders while allowing Magnetic shareholders to maintain exposure to the upside potential unlocked by Genesis’ operational capabilities.
Pathway to Growth and Enhanced Market Position
Genesis’ Executive Chair, Raleigh Finlayson, highlighted the value creation potential of the transaction, emphasizing the complementary nature of the assets and the expertise of the combined teams. The acquisition supports Genesis’ growth strategy, dubbed “ASPIRE 500,” aiming to increase annual gold production to 500,000 ounces. An updated multi-year strategic plan is expected following completion.
Magnetic’s Managing Director, George Sakalidis, noted the offer follows a thorough strategic review and provides Magnetic shareholders with a premium and ongoing participation in a larger, diversified gold producer. The deal also enhances liquidity and market positioning for Magnetic shareholders through Genesis’ ASX100 index inclusion.
Conditions and Timeline
The scheme is subject to customary conditions, including approval by Magnetic shareholders, court sanction, and regulatory clearances, notably from the Australian Competition and Consumer Commission. The Magnetic Board unanimously recommends the scheme in the absence of a superior proposal, with major shareholders holding nearly 20% of Magnetic shares committed to voting in favour.
The indicative timetable anticipates the scheme meeting in late May or early June 2026, with completion expected shortly thereafter. The transaction is poised to significantly reshape the gold production landscape in the Laverton region, pending final approvals.
Bottom Line?
As Genesis moves to integrate Magnetic’s Lady Julie resource, investors will watch closely for regulatory approvals and the unfolding of its ambitious ASPIRE 500 growth plan.
Questions in the middle?
- Will the Australian Competition and Consumer Commission approve the acquisition without conditions?
- How will Genesis manage integration risks and realise cost synergies at Laverton?
- What impact will the acquisition have on Genesis’ share price and dilution levels post-completion?