A bonanza gold price has not dampened the appetite for discussion around mergers and acquisitions in the current market, with some more willing to comment than others.
A bonanza gold price has not dampened the appetite for discussion around mergers and acquisitions in the current market, with some more willing to comment than others.
The companies at the heart of a long-mooted potential tie up between Raleigh Finlayson’s Genesis Minerals and Vault Minerals played their cards close to their chest on the first day of the Diggers & Dealers Mining Forum today.
Vault corporate development officer Len Eldridge flat-batted suggestions that his company – formed by the merger of Red 5 and Silver Lake Resources in 2024 – may have been the subject of an approach.
Speculation has endured throughout the year that Genesis and Vault could look at a tie-up of their own, after the former embarked on an accretive streak which has rapidly grown its tenure in the Leonora region from a single mine operation only two years ago.
Vault’s portfolio includes its Leonora operations, with more than 6 million ounces worth of mineral resources in the ground.
Quizzed on merger and acquisition potential, Mr Eldridge said his focus was on internal growth, and suggested any suitor would need to recognise that a move for Vault would not come cheaply.
Vault is currently investing in underground exploration and mill expansion, while its hedge book is slated to roll off in around 12 months in a move which should generate significant cashflow.
“When you think about M&A, change of control, shareholders ultimately decide,” he said.
“But from our perspective, we would need to see these opportunities valued into the business as much as they can be.”
Mr Eldridge said as a trading company, Vault would not comment on M&A rumours.
Meanwhile, Genesis told the market earlier this year that its focus was on development of the assets in its project book where it is building towards a production target of 400,000 ounces per annum.
Today, its chief operating officer Matthew Nixon opted not to front media after telling the forum Genesis was “unashamedly a growth business” as he highlighted the company’s organic production growth goals.
Mr Nixon’s presentation outlined Genesis’ plans for the next stage of its regional development at Leonora.
Ramelius a target?
Fresh off its acquisition of Spartan Resources, the enlarged goldminer Ramelius Resources may now be a takeover target for larger suitors, according to new deputy chair Simon Lawson.
Speaking alongside Ramelius managing director Mark Zeptner a week after the company he led was acquired, Mr Lawson said Ramelius would be focused on gold production going forward.
“I’m not going to put words in Mark’s mouth, but I think Ramelius is just going to be sitting there watching what’s going on and focusing on the knitting,” he said, when asked about M&A.
“I still think there’s a fair bit of interest.
“I think maybe the combination has actually made Ramelius combined a bit of a target for bigger players.”
Mr Zeptner said his focus would remain on production, and integrating Spartan’s Dalgaranga resource into Ramelius’ production planning.
“That’s not something I’ve ever had to worry about, and I will continue to do my job,” he said.
“My job is not to worry about that.”
Twelve months ago at the 2024 conference, the pair admitted they had "had coffee" to talk over what was then a strategic stake bought up on market in Spartan by Ramelius.
The jungle drums around a potential grew louder until Ramelius announced its $2.4 billion move for Spartan in March - a deal completed last week.
The sector is flush with cash, with record high gold prices pushing out margins for unhedged gold producers but also driving up the cost of acquisition for those looking to get deals done with cash.
The state’s biggest miner by ounces produced is Northern Star Resources, and its chief executive Stuart Tonkin said over the weekend that a recent cooling could serve as a catalyst for more M&A in the booming sector.
“Northern Star’s obviously just done De Grey, and we’re integrating things, we’re building things, and we’ve got our own pathway set,” he said.
“But I think in the junior end of town, you’ll see a lot more of that positioning, and perhaps cooperation.”
Gold Fields is in the process of buying its joint venture partner Gold Road Resources, and the pair will appear back-to-back on the final afternoon of the conference on Wednesday.
Gold has been the flavour of the first day of Diggers & Dealers, and stocks had a bumper day on the ASX, with four of the top five gains recorded by yellow metal producers.
