PERTH (miningweekly.com) – Merger talks are afoot in the Leonora Province in Western Australia, with gold miner St Barbara on Monday confirming that it had resumed talks with fellow-listed Genesis Minerals.

Talks between St Barbara and Genesis fizzled out last month, with Genesis saying that it had abandoned talks with St Barbara.

However, St Barbara on Monday told shareholders that these discussions have now resumed, and were regarding a "potential business combination aimed at consolidation of the Leonora Province and the unlocking of operating and development synergies in the region”.

Genesis has gone into a trading halt, pending an announcement of a "material corporate transaction and a capital raise”.

St Barbara said that its talks with Genesis were unrelated to the company’s decision to go into a trading halt.

Instead, reports emerged that Genesis was on the cusp of revealing a near A$111-million offer for fellow gold miner Dacian Gold, with the Financial Review reporting that the acquisition would be funded through a major capital raise.

The Financial Review reported that Dacian shareholders would be offered 0.0843 Genesis shares for their shareholding in the takeover target.

Dacian, which also went into a trading halt on Monday, owns the Mt Morgans gold project. The company recently announced plans to suspend openpit mining operations at the Jupiter deposit, at its Mt Morgans mine, as difficult conditions resulted in significant inflationary cost pressures, which in turn resulted in an increase in cost base, prompting a review of the operating strategy.

Underground operations will continue at Mt Morgans until the previously developed stopes have been mined in the first quarter of 2023.

For its part, St Barbara’s Leonora operations consist of the Gwalia underground mine and 1.4-million-tonne-a-year processing plant, as well as nearby development opportunities. The Leonora assets contributed 100 394 oz of gold to St Barbara during the first half of 2022.

St Barbara in April also completed the takeover of Bardoc Gold, adding to its portfolio the advanced Aphrodite and Zoroastrian underground deposits, which lie immediately adjacent to the rail line that runs to the Leonora processing plant.