PERTH (miningweekly.com) – Junior Kin Mining has increased its stake in takeover target Dacian Gold to 7.34%, following a further on-market purchase, and is hoping to take advantage of the consolidation in the Leonora region.
Kin in October took an initial 1.63% interest in Dacian, which is in the midst of a takeover offer by ASX-listed Genesis Minerals, which is offering 0.0843 of its own shares for every Dacian share held, implying a value of 10.2c a share for the Dacian holding, and an equity value of A$111-million, based on Genesis’ last closing price.
Genesis acquired majority control of Dacian at the end of September, and the takeover offer is scheduled to close on Monday.
Kin told shareholders that the company viewed the Dacian assets as good value at current prices and that the three-million-tonne-a-year Mt Morgans treatment plant, located adjacent to Dacian’s 2.2-million-ounce mineral resource, was a strategically valuable asset that would play an important role in the inevitable consolidation of the Leonora district.
The Kin board also believes that its 1.4-million-ounce Cardinia gold project has significant strategic value in any future consolidation of the Leonora region.
Kin has acquired a strategic holding in Dacian to ensure that it has the ability to participate in a "meaningful way" in any future consolidation, while also ensuring that available milling capacity is appropriately utilised. Kin intends to engage with the Dacian board and management team to help maximise the value of the business for the benefit of all shareholders, the company said on Monday.
“While Kin continues to build its mineral resources through exploration to support a standalone processing facility, we continue to evaluate all early, low capital cost opportunities to monetise parts of our resource base, if this makes commercial sense,” said MD Andrew Munckton.
“Approximately half of our 1.4-million-ounce mineral resource, which is predominantly oxide and transitional material, is best suited to the conventional grind and leach processing technology offered by Mt Morgans and other processing facilities located within our sphere of influence. Kin’s fresh sulphide ores are optimally suited to flotation and concentrate fine grinding prior to leaching, however these sulphide ores still perform acceptably through conventional processing in the absence of a suitable flotation and fine grinding facility.”