There’s a bidding war among rival Australian mining companies for Vault Minerals, owners of the Sugar Zone mine north of White River.
After a planned merger announced in May between Vault and Regis Resources in an all-stock deal worth A$10.7 billion ($10.4 million Canadian), Genesis Minerals has suddenly swooped in with an unsolicited A$5.6-billion ($5.53 million Canadian) cash-and-share offer that Vault’s board of directors has deemed to be an overall better arrangement.
In a July 6 filing to the Australian Securities Exchange, Genesis wants to acquire of Vault’s shares through a court-approved “scheme of arrangement” where shareholders will be able to have their say on the best offer.
The exchange ratio is 0.7629 Genesis shares per Vault share, plus $0.475 in cash for every Vault share held. In their pitch, Genesis said their offer represents a 14.5 premium price per Vault share than that of the Regis offer.
If the deal were to go through, Genesis shareholders would hold 59.8 per cent of this combined company with Vault shareholders owning the remaining 40.2 per cent.
Vault’s directors acknowledge the Genesis offer is “superior” that of Regis, which has five days to match or improve up upon the Genesis offer.
Vault has three major mining operations in Western Australia and one in Canada, its Sugar Zone mine, 30 kilometres north of White River, where activity is just beginning to stir after a three-year hiatus.
But on this particular deal, Sugar Zone is very much a backburner asset.
Genesis is promoting the operational synergies in gold-rich Western Australia and the opportunity to be a dominant gold player in the Leonara-Laverton gold district where both companies have mines and could share infrastructure.
A possible Genesis-Vault link-up would consolidate 700,000 ounces a year of gold production in this region.
There’s been a flurry of deal-making gold mergers and acquisitions in Australia. In Vault’s case, it is the creation of a 2024 merger between Australian miners Red 5 and Silver Lake Resources, the latter having acquiring the Sugar Zone mine in a CCAA sale after Harte Gold sought creditor protection in 2021.