KIN Mining shareholders land a bonus on back of Genesis’ bid for full ownership of Dacian

Shareholders in KIN Mining (ASX: KIN) scored a nice bonus when the company’s shares leapt up 31% on the news that Genesis Minerals (ASX: GMD) has bid to acquire the remaining shares in Dacian Gold (ASX: DCN) it does not already hold.

The increase was so large that KIN, which holds a 7.34% interest in Dacian Gold, received a “speeding ticket” from the ASX.

Under the recommended offer to acquire remaining approximately 20% of Dacian Gold, Genesis says its bid has an implied value of $0.235 per share and a total equity valuation of $286 million.

Leonora gold grand plan

In making the move to wrap up its ownership of Dacian, Genesis said the “logical transaction” will simplify the ownership of large-scale resources, reserves and milling infrastructure in Western Australia’s golden Leonora District.

Genesis initially unveiled its Leonora strategy in April 2022, saying its acquisition of Dacian would allow it to build a premium Australian gold business with sustainable, high quality, 300,000 plus ounces per annum production.

Genesis managing director, Raleigh Finlayson, said that following an intense period of transformative acquisitions, Genesis is well placed with the assets and people in place to achieve this strategy.

Logical growth step

“The acquisition of the remaining ~20% of Dacian is a logical step to simplify the ownership of an enviable position in the Leonora District – 15Moz of combined Resources, 3.9Moz of combined Reserves and 4.3Mtpa of combined milling capacity,” Mr Finlayson said.

“Genesis is now focused on delivering a five-year outlook to the market in March 2024, cornerstoned by a long life, ‘margin over ounces’ Leonora business plan.”

Mr Finlayson said that Dacian’s shareholders will receive significant benefits including an attractive premium of approximately 88% to the company’s last closing price and around 130% on the previous Genesis takeover offer, increasing to approximately 116% and around 165% respectively if the improved offer consideration becomes payable.

He said Dacian would also have reduced likelihood of future funding requirements and associated dilution risk for its shareholders.

Dacian backs acquisition

The Dacian independent board committee has unanimously recommended that shareholders accept the offer subject to no superior proposal emerging and subject to the independent expert opining agrees the offer is fair and reasonable.

“In addition to a significant premium, the offer provides Dacian shareholders with the opportunity to become shareholders of a company with significantly increased scale and demonstrated operational capability that is focussed on the Leonora and Laverton regions of Western Australia,” said Dacian’s independent non-executive chairman Craig McGown.

“On successful completion of the offer, Dacian shareholders will continue to have exposure to the future upside associated with Dacian’s assets which are highly complementary to Genesis’ existing portfolio, whilst mitigating and diversifying their risks by becoming part of a larger, and more diversified gold company.”

The offer is currently scheduled to close on 17 November 2023.