Magnetic Resources to be acquired by Genesis Minerals in recommended scheme with shareholder approval scheduled for June 2026

Recommended Scheme of Arrangement Details

Magnetic Resources NL (ASX:MAU) has formalised its proposed acquisition by Genesis Minerals Limited (ASX:GMD) through a scheme of arrangement under Part 5.1 of the Corporations Act. The Scheme Booklet, containing critical information including the Independent Expert’s Report, was registered with ASIC on 29 April 2026 and is being dispatched to Magnetic shareholders ahead of the planned Scheme Meeting on 3 June 2026. Shareholders will receive a mix of $1.40 cash and 0.0873 Genesis shares per Magnetic Ordinary Share, with options to elect for all cash or all scrip consideration subject to scaleback mechanisms.

The Magnetic Board unanimously recommends voting in favour of the Scheme, subject to no Superior Proposal emerging and the Independent Expert maintaining its view that the Scheme is in the best interests of shareholders. The Independent Expert, BDO Corporate Finance Australia, has concluded the Scheme is fair and reasonable on a controlling interest basis, with the Default Consideration representing a 23-35% premium to Magnetic's pre-announcement trading prices. Major Magnetic shareholders holding approximately 19.64% have provided voting undertakings supporting the Scheme, adding weight to the transaction's likelihood of completion.

Strategic Rationale and Synergies

The acquisition aligns with Genesis’ strategy to consolidate assets in the Laverton gold district, expanding its footprint by approximately 2.4% ownership post-implementation. Magnetic’s flagship Lady Julie Gold Project, boasting a 2.24 million ounce Mineral Resource and recently expanded underground production targets, adjoins Genesis’ Laverton Gold Project tenure. This adjacency presents opportunities for operational synergies such as integrated open pit mining, shared processing infrastructure at Genesis’ 3Mtpa Laverton mill, and leveraging Genesis Mining Services’ expertise.

Genesis plans to incorporate Lady Julie into its broader Laverton operations, potentially improving project economics by avoiding the need for standalone processing facilities and enabling a more efficient development schedule. Eligible Magnetic shareholders receiving scrip will gain exposure to Genesis’ producing assets and broader portfolio, which includes the Leonora operations and the Bardoc Gold Project, thereby diversifying risk and increasing liquidity.

Financial and Valuation Highlights

The Independent Expert’s valuation supports the fairness of the Scheme, with Magnetic shares valued between $1.82 and $2.51 on a controlling and diluted basis. The Default Consideration, comprising cash and Genesis shares valued on a minority interest basis, ranges from $1.88 to $1.97 per Magnetic Ordinary Share. Magnetic shareholders can elect to receive Maximum Cash Consideration ($2.00 per share) or Maximum Scrip Consideration (0.2911 Genesis shares per Magnetic Ordinary Share), both deemed fair but subject to scaleback arrangements.

Genesis will fund the cash component of the Scheme Consideration (capped at approximately $445 million) through existing cash reserves and an undrawn $300 million revolving cash advance facility. Genesis’ strong balance sheet and ASX100 status underpin its capacity to finance the development of Lady Julie and other growth initiatives.

Next Steps and Shareholder Meeting

The Scheme Meeting will be held in hybrid format on 3 June 2026 in Perth, with voting eligibility determined as at 4pm AWST on 1 June 2026. Magnetic shareholders are encouraged to read the Scheme Booklet in full and consider the Independent Expert’s Report before voting. Proxy voting and direct voting options are available, with the Chair intending to vote undirected proxies in favour of the Scheme.

Following shareholder approval and satisfaction of all conditions precedent, including Court approval expected on 9 June 2026, the Scheme will become effective, with implementation steps including payment of Scheme Consideration and issuance of Genesis shares scheduled for June 2026. Magnetic will be delisted from the ASX on 23 June 2026, becoming a wholly owned subsidiary of Genesis.

Shareholders should note the potential tax implications of the Scheme and consider seeking independent advice. The Independent Expert’s Report and detailed Scheme Booklet provide comprehensive information on risks, benefits, and procedural matters.

Valuation and Market Context

The valuation of Magnetic prior to the Scheme incorporates a discounted cash flow analysis of the Lady Julie Project, adjusted for notional funding requirements, residual resources, corporate overheads, and transaction costs. The Independent Technical Specialist report by SRK Consulting supports the technical assumptions underpinning the valuation.

Magnetic shares have displayed relatively low liquidity historically, whereas Genesis shares are highly liquid, supporting the use of Genesis’ post-announcement share price as a reliable indicator of the Scheme Scrip Consideration’s value. The market reaction to the Scheme announcement has been positive, with Magnetic shares trading at a premium and Genesis shares reflecting the combined entity’s prospects despite recent geopolitical volatility.

Magnetic shareholders should monitor the upcoming Scheme Meeting results and Court approval process closely. The transaction marks a significant consolidation in Western Australia’s gold mining sector, with potential for operational efficiencies and enhanced shareholder value.

Magnetic’s ongoing permitting progress, including updated mining proposals and regulatory engagement, continues to support the project’s development readiness, complementing Genesis’ operational capabilities in the region. The combined group’s strategic plans include an aspirational production goal of 500,000 ounces per annum, reflecting growth ambitions post-acquisition.

Overall, the Scheme offers Magnetic shareholders a premium exit opportunity with optionality in consideration form, exposure to a larger producing entity, and participation in a strategically consolidated gold portfolio.

Investors should weigh the uncertainties inherent in mining project development, market volatility, and regulatory approvals as the transaction proceeds toward completion.

For a detailed breakdown of the Scheme terms, valuation methodologies, and risk factors, shareholders should consult the Scheme Booklet and Independent Expert’s Report.

Magnetic’s forthcoming shareholder meeting and subsequent court hearing will be pivotal milestones in the transaction’s progress, setting the stage for integration and future growth under Genesis’ stewardship.

Shareholders and market participants will be watching the vote outcome and court approval closely, mindful of the potential for competing proposals or changes in market conditions that could impact the transaction’s trajectory.

In the meantime, Magnetic shareholders have the opportunity to consider the Scheme carefully, seeking professional advice tailored to their individual circumstances.

With the Scheme’s implementation, Magnetic’s Lady Julie Gold Project will be positioned within a broader operational framework, potentially unlocking value through synergies and scale.

Magnetic’s directors, including Eric Lim and George Sakalidis, have declared their intention to vote in favour of the Scheme, reflecting confidence in the transaction’s merits.

Genesis’ board, led by Executive Chair Raleigh Finlayson, views the acquisition as a compelling step in its growth strategy, leveraging complementary assets and operational expertise.

As the transaction unfolds, the combined entity’s market positioning and operational footprint in Western Australia’s prolific gold regions will be enhanced, with implications for regional development and shareholder returns.

Magnetic shareholders should prepare to participate in the Scheme Meeting and exercise their voting rights accordingly.

Overall, the acquisition represents a significant consolidation in the gold mining sector, with strategic, financial, and operational implications that warrant close attention in the months ahead.

Magnetic scheme meeting has been scheduled for 3 June 2026, following the draft booklet lodgement and supported by the Independent Expert’s Report(2924-03083966-6A1322786). The Scheme offers a premium over recent Magnetic trading prices, with major shareholders backing the deal.

Magnetic’s permitting progress and Genesis’ operational scale in the Laverton region underpin the strategic rationale, with combined Mineral Resources exceeding 21 million ounces and Ore Reserves over 5 million ounces. The transaction is expected to close by late June 2026.

Investors should watch for the vote outcome and court approval, which will determine the transaction’s completion and subsequent integration phase.