Genesis Reports Record FY26 Production and Cash Flow, Fast-Tracks Growth Projects, and Agrees Merger with Vault

Record Production and Cash Flow Close FY26

Genesis Minerals Limited (ASX:GMD) closed FY26 with a bang, hitting a record 285,402 ounces of gold production at an all-in sustaining cost (AISC) of A$2,670 per ounce, comfortably within its guidance range. The June quarter alone delivered 70,766 ounces at an AISC of A$2,797/oz, generating A$480.4 million in gold sales revenue at an average price of A$6,175/oz. This robust operational performance underpinned an underlying cash build of A$263.8 million in the quarter, bringing FY26 underlying cash generation to an impressive A$899 million before acquisitions and investments.

Growth Projects Accelerate Production Outlook

Genesis is aggressively fast-tracking its growth pipeline, notably the Tower Hill open pit project where pit dewatering is complete and mining has commenced ahead of schedule. The company has ordered a larger-than-planned mining fleet, including 600-tonne excavators and 240-tonne haul trucks, aiming for higher productivity and lower unit costs. Construction of the new Leonora Rail Terminal is underway to support future stages of Tower Hill mining, with first ore expected in FY28.

Meanwhile, the Bruno Lewis open pit project has been brought forward, with open pit mining set to start in the current September quarter. Site infrastructure including a 120-person accommodation village and road networks are in development, supporting an uplifted reserve of 9.2 million tonnes at 1.0 g/t for 280,000 ounces. These projects are underpinned by strong drilling results, with 21 intercepts exceeding 100 gram-metres reported in the June quarter alone, reinforcing the company’s exploration-driven growth strategy.

Magnetic Acquisition and Strategic Merger with Vault

Genesis completed its acquisition of Magnetic Resources during the quarter, adding the high-grade 2.2 million ounce Lady Julie deposit and expanding its footprint on Laverton’s rapidly emerging Chatterbox Trend. This acquisition complements Genesis’s existing portfolio and strengthens its production outlook.

Post quarter-end, Genesis agreed to merge with Vault Minerals in a deal valued at approximately A$12.6 billion pro forma. The merger, expected to complete by November 2026, will create a top 20 global gold producer with combined annual production of 600,000 to 700,000 ounces, resources of 34 million ounces, and reserves of 9 million ounces. The companies anticipate unlocking around A$2 billion in post-tax synergies, largely unique to this combination, driven by operational efficiencies and scale benefits. The proximity of their operations in Western Australia’s Leonora-Laverton district is a key factor in the merger’s strategic rationale.

Financial Position and Cost Discipline

Genesis maintains a strong balance sheet with net cash of A$320.1 million at 30 June 2026, following a A$200 million drawdown on an upsized A$300 million senior corporate financing facility. The company’s disciplined cost management is evident in its tight AISC control despite inflationary pressures, with FY27 stand-alone guidance forecasting production of 270,000 to 300,000 ounces at an AISC of A$2,750 to A$3,050 per ounce. The second half of FY27 is expected to see lower costs than the first half.

Fuel supply remains stable despite global disruptions, with diesel sourced under long-term contracts and mills powered by Western Australian natural gas. The company’s sizeable ore stockpiles of over 1.8 million tonnes at 0.9 g/t, representing about 54,000 ounces of gold, provide operational flexibility and buffer against supply interruptions.

Exploration and Strategic Planning Ahead

Exploration efforts are expanding significantly, with the FY27 budget nearly doubling to A$80-90 million. This increase reflects the high-impact targets generated by recent drilling success and the strong cash flow supporting growth. The company is drilling extensively across its portfolio, including the underexplored "Uppers" zone at the Gwalia underground mine, which has yielded multiple high-grade intercepts.

Following the merger, Genesis plans to release a combined long-term strategic plan in the first half of 2027, replacing its stand-alone outlook. This plan will detail multi-year production and cost assumptions for the merged entity, providing a clearer picture of the company’s growth trajectory and operational synergies.