Silver Lake takes another run at St Barbara

22nd May 2023

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia


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PERTH ( – Gold miner St Barbara on Monday said it was weighing a revised offer from fellow listed Silver Lake Resources, which at the end of last week improved its offer for St Barbara’s Leonora assets, in Western Australia.

Silver Lake previously revised its offer to St Barbara to A$707-million, comprising a A$326-million cash component and the issue of 327.1-million shares, valued at A$381-million, after the gold miner rejected its initial offer in support of a A$600-million agreement with Genesis Minerals, which would would give Genesis control of St Barbara’s Leonora assets for an upfront 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.

Genesis subsequently revised its own offer with an additional five-million shares upfront upon the completion of the transaction, and accelerating the conversion of the 52.2-million performance rights into Genesis shares immediately upon the completion of the transaction.

At the end of last week, Silver Lake further improved its offer for the Leonora assets to A$722-million, comprising A$370-million in cash and 327.1-million of its own shares, valued at A$352-million.

The ASX-listed Silver Lake said that the improved proposal represented a significant premium to the revised Genesis transaction, providing equivalent cash consideration in addition to continuing to provide St Barbara shareholders with exposure to a larger, more liquid and diverse gold business with increased leverage to the Australian dollar gold price and a robust balance sheet with strong forecast operating cash flows following a period of significant investment in the first half of this year, to support the growth profile.

Silver Lake told its own shareholders that the company had, over the last 12 months, sought constructive engagement with St Barbara over a potential transaction, but added that at no stage had the gold miner been willing to "meaningfully engage" with Silver Lake.

Furthermore, Silver Lake noted that St Barbara had publicly aired concerns around Silver Lake’s initial proposal without privately discussing the concerns with the suitor, making it difficult for the company to address the concerns in any revised proposal.

“Silver Lake confirms it remains ready and willing to engage with the St Barbara board to explore a transaction that has the potential to be beneficial to both sets of shareholders, create a genuine midtier gold producer with immediate gold production of some 400 000 oz/y and is considered by Silver Lake to be a superior outcome (if completed) for St Barbara shareholders than the existing Genesis proposal.

“Like any disciplined acquirer, Silver Lake requires access to certain due diligence information in order to progress the improved Silver Lake proposal to a binding offer and is not able to waive this requirement,” the company said in a statement.

St Barbara on Monday acknowledged the receipt of the revised bid, saying it was being reviewed by the company’s board.

Edited by Creamer Media Reporter


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