Genesis Minerals Advances Tower Hill and Eyes Magnetic Acquisition Amid Strong Q3 Cash Surge

Cash Generation Powers Growth Ambitions

Genesis Minerals Limited (ASX:GMD) has fortified its financial position with a near-doubling of cash and equivalents to A$600 million by the end of March 2026, driven by a strong quarter of gold production and disciplined cost control. The company produced 67,497 ounces of gold at an all-in sustaining cost (AISC) of A$2,685 per ounce, generating A$439.4 million in sales revenue and an unaudited net profit after tax (NPAT) estimated between A$145 million and A$155 million.

Underlying cash flow before growth investment surged to A$253 million this quarter, up from A$217 million in December, reflecting steady operational execution across Genesis’ portfolio. This cash build has been achieved despite ongoing investments in expansion projects and exploration, underscoring the company’s ability to fund growth organically while remaining debt-free.

Tower Hill Project Accelerates with New Mill and Site Works

The company is advancing its flagship Tower Hill open pit project ahead of schedule, with site clearing and infrastructure preparations underway. Tower Hill boasts a high-grade reserve of 15 million tonnes at 2.0 g/t for 1 million ounces of gold, and the project targets first ore in FY28. Genesis has appointed GR Engineering Services (ASX:GNG) to build a dedicated 3.5 to 4.0 million tonnes per annum mill at Leonora, with capital costs estimated between A$250 million and A$280 million.

This new mill is expected to deliver significant operating cost savings by eliminating the need to haul ore 100 kilometres to the Laverton mill, saving an estimated A$225 million in transport costs alone. The mill construction is progressing with A$20 million of critical equipment orders placed, including SAG and ball mills.

Magnetic Acquisition Set to Boost Production Profile

Genesis is poised to complete its A$639 million acquisition of Magnetic Resources by June 2026, subject to conditions precedent. This deal substantially lifts the company’s growth aspirations, increasing its production target by 25% to an aspirational 500,000 ounces per annum, dubbed “ASPIRE 500.” The acquisition adds valuable assets near Laverton, including the high-grade Lady Julie project, and enhances milling capacity options.

The acquisition builds on Genesis’ strategy to consolidate adjacent Leonora and Laverton assets, unlocking operational synergies and scale economies. This follows earlier announcements where Genesis set sights on 500,000 ounces with Magnetic acquisition plans recommended acquisition of Magnetic Resources.

Operational Highlights and Safety Improvements

Operationally, Genesis completed all third-party ore purchases during the quarter, ramping up production from its own Genesis ore sources. The Leonora mill processed a record 368,000 tonnes at 3.9 g/t grade, while the Laverton mill processed 738,000 tonnes at 1.2 g/t. Underground mining at Gwalia and Ulysses continues to deliver consistent ore grades, with development advances reaching new highs.

Safety metrics improved notably, with zero lost time injuries (LTIs) reported and the Lost Time Injury Frequency Rate (LTIFR) holding at a low 0.6. The Serious Injury Frequency Rate (SIFR) also declined to 3.6, reflecting ongoing safety focus.

Fuel Supply Stability and Financial Flexibility

Genesis has so far avoided disruptions to diesel fuel supplies amid broader Australian energy uncertainties. The company benefits from Western Australian natural gas powering its Leonora and Laverton mills and maintains substantial ore stockpiles to mitigate any short-term fuel interruptions.

Post-quarter, Genesis extended and upsized its senior corporate financing facility from A$225 million to A$300 million, with a lower margin and a maturity extended to March 2028. The facility remains undrawn but is expected to partially fund the Magnetic acquisition’s A$445 million cash component.

Gold price protection instruments cover 27,000 ounces through zero cost collars and put options, providing downside price risk mitigation while allowing participation in favourable price movements.

Looking Ahead to Updated Long-Term Plans

Genesis plans to release an updated long-term plan in the September quarter 2026, incorporating multi-year production and cost assumptions, FY27 guidance, and detailed integration of the Magnetic acquisition. This update will also outline options to expand milling capacity at Laverton to 4.5-5.0Mtpa, potentially lifting group milling capacity to 8-9Mtpa.

Exploration remains active with A$8.3 million invested this quarter and drilling updates expected shortly. The Bruno Lewis open pit project is progressing with mining targeted to commence in December 2026, adding further scale and shallow, oxide ore to the portfolio.