Silver Lake makes another play for St Barbara assets

11th May 2023

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia


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PERTH ( – Gold miner Silver Lake Resources has revised its proposal to acquire fellow-listed St Barbara’s Leonora assets, in Western Australia.

St Barbara earlier this month rejected an unsolicited, non-binding, indicative and conditional proposal from Silver Lake, offering A$732-million for the Leonora assets, comprising a A$326-million cash consideration and a Silver Lake scrip consideration comprising 327.1-million new shares in Silver Lake at an implied value of A$406-million.

The net after-tax value of the indicative proposal, after allowing for the break fee payable to Genesis, is estimated at A$668-million.

Instead, St Barbara stuck to its A$600-million agreement with Genesis Minerals, which would give Genesis control of St Barbara’s Leonora assets for an up-front cash payment of A$370-million, the issue of 147.8-million shares in Genesis, valued at A$170-million, and an additional 52.2-million shares in Genesis, valued at A$60-million, contingent on Tower Hill achieving first production.

St Barbara said at the time that factoring in the break-fee with Genesis, the Silver Lake proposal only represented a 9% premium to the Genesis transaction, and that a deal with Silver Lake would not offer the obvious synergies that the Genesis transaction offered.

Silver Lake has now revised its offer to A$707-million, comprising a A$326-million cash component and the issue of 327.1-million shares, valued at A$381-million, saying the new offer represented a significant premium to the Genesis transaction.

Silver Lake told its shareholders that the revised proposal also addressed key concerns raised by St Barbara regarding the previous proposal, including the perception that St Barbara would have significantly less cash to fund its obligation and capital requirements, compared with the Genesis Minerals bid, and the requirement for Silver Lake to obtain an independent expert report to gain shareholder approval of the offer.

The company said that the revised proposal would provide St Barbara with a 7.5% interest in Silver Lake upon completion of the transaction, and would provide the gold miner with A$111-million in additional liquid assets, providing it with greater flexibility to fund its working capital requirements.

The new offer will also not require an independent expert’s report, condensing the time period for implementation of the proposed transaction.

“We’ve listened to the concerns of the St Barbara board aired publicly about our original non-binding proposal to buy the Leonora assets and have addressed them. By separating the issuance of the Silver Lake scrip component to St Barbara and its shareholders, we have shortened the time to completion and increased the liquidity available to St Barbara,” said Silver Lake MD Luke Tonkin.

“The total consideration remains 27% higher than the consideration being offered by Genesis and provides incoming St Barbara shareholders with significant exposure to a genuine midtier gold producer with a diversified and complementary portfolio of production, expansion, development and exploration assets.”

Edited by Creamer Media Reporter



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