Ground Breakers: Could Raleigh Finlayson emerge as gold’s new Pac-Man?

• Raleigh Finlayson’s Genesis in trading halt pending potential move on Dacian Gold
• St Barbara also confirms it is back in discussions with Genesis on potential Leonora region consolidation
• Mining sector slightly in the red as iron ore price falls

Raleigh Finlayson’s Genesis Minerals (ASX:GMD) has locked itself away behind a trading halt to raise up to $100 million in new cash, in a reported move on struggling gold miner Dacian Gold (ASX:DCN).

It comes after $100 million capped Dacian suspended open pit mining at its Mount Morgans gold mine near Laverton, within touching distance of Genesis’ 2Moz Leonora gold projects.

While Genesis does not have much heft in terms of resources or infrastructure – the play seems to be a move on Dacian’s underperforming but high replacement value processing plant – it does have industry kudos and credibility in the form of Finlayson.

The gold boss, who moved into Genesis last year after a short vacation from his departure as Northern Star Resources (ASX:NST) MD, is one of the top names tipped to be the gold sector’s new “hero” as the industry struggles with rising costs and a glut of stuttering mid-tier miners.

Separately St Barbara (ASX:SBM) and Genesis have confirmed they are again having fireside chats, though nothing formal has happened with the $304 million capped junior and the Gwalia gold mine owner.

St Barbs is trying to sell its troubled Simberi mine in PNG, which would smooth a sort of regional consolidation play and is worth a little over double Genesis’ market cap despite boasting a production profile of almost 300,000ozpa to Genesis’ zero.

If successful in his corporate machinations, Finlayson, who led Saracen Mineral Holdings into its $16 billion merger with Super Pit co-owner Northern Star two years ago, would appear to be forging a reputation as the WA gold sector’s new Pac-Man.

That is a title lovingly given to his WA School of Mines colleague and former Northern Star boss Bill Beament in 2013 and 2014, when he aggressively gobbled up the cherries left behind by Newmont and Barrick at their Kanowna Belle, Kundana, Plutonic and Jundee mines.

Miners close to breaking even despite iron ore price struggles

Iron ore prices are continuing to look a little timid, with Singapore 62% futures down 4.01% to US$110/t today.

That’s around the long term average over the past few years, with weak steel PMIs last week and rumours China could enforce new emissions-related production cuts impacting the futures market.

“Iron ore sank for a third consecutive day following renewed fears of curbs on Chinese steel output. Rumours swirled through the market on Friday that the government was targeting a cut to annual output for a second year in 2022,” ANZ research’s David Plank said.

“This comes as steel mills in China’s biggest steelmaking province, Hebei, reportedly opted to implement an annual overhaul of furnaces much earlier than normal.

“The steel industry’s PMI in June plunged to its lowest level since the financial crisis of 2008 amid weak margins and high steel inventories.”

BHP (ASX:BHP) shares were off 1.15% this morning, but other iron ore majors were more or less unchanged.

The gold sector showed signs of life though after a troubling month, with all the big players in the green.

Northern Star was up 2.5%, with beaten down Evolution (ASX:EVN) up 1.89% and Newcrest (ASX:NCM) gaining 1.68%.

The materials sector was down 0.06%, the only sector in decline but close to breaking even.

Coal miners New Hope Corp (ASX:NHC) and Whitehaven (ASX:WHC) led the energy sector higher along with oil and gas majors Santos (ASX:STO) and Woodside (ASX:WDS).