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Mining
More drama in the contest between Silver Lake Resources (ASX:SLR) and Genesis Minerals (ASX:GMD) for St Barbara’s (ASX:SBM) Gwalia gold mine.
Long betrothed — though a more formal marriage proposed between St Barbara and Raleigh Finlayson’s GMD has been replaced by more of an open relationship that would see Genesis walk away with Gwalia and SBM retain a large stake in the ASX-listed gold co. — Silver Lake has emerged as a late interloper to spoil the pair’s happy day.
It has been piling on the pressure for SBM’s board to open up due diligence and consider its offer of $370m cash (equal to the GMD cash consideration) and 327.1m shares valued at $348m.
It is, Silver Lake maintains, a 14.7% premium to GMD’s ~$625m offer. And in a case of speak now or forever hold your peace, SLR has hit up major SBM shareholders to register their objections ahead of a vote on the Genesis transaction on June 20.
SLR told the stock exchange today that 9.34% SBM shareholder L1 Capital intends to vote against the genesis proposal, with 8.6% holder Baker Street Capital Managers also publicly calling for a vote to be deferred so SBM can weigh up GMD’s bid against competing proposals.
“Further, another top 20 St Barbara shareholder, Geoff Cranfield, has been publicly quoted in the Australian media as being supportive of L1 Capital’s position that “all interested parties” should be “invited for discussions and if relevant, due diligence,” Silver Lake added.
SLR says if it gets access to due diligence before June 5 it can still complete it before the June 20 vote happens. There’s more in this one as well, with Silver Lake questioning the difference in synergies between the Finlayson bid and Silver Lake’s.
One of the reasons why SBM, which would have shares in the purchasing entity no matter which path it goes down, likes this Genesis bid is because it will consolidate three assets in the balkanised Leonora gold field.
In a corporate presentation yesterday titled “On Track” said it would complete a strategic review of the Gwalia asset in the December half in a staged plan to grow production from 180,000-200,000ozpa (Gwalia + its Ulysses underground mine) to 300,000ozpa with the reopening of its ~80% owned Mt Morgans mill held under the auspices of Dacian Gold (ASX:DCN) and the Tower Hill development.
At a 2.15% loss lead by the big iron ore miners there was little joy anywhere in the Materials sector.
Iron ore futures floated aimlessly in the direction of US$95/t this morning, while base metals flirted with the red overnight.
Little relief for investors in yesterday’s tumbler Paladin Energy (ASX:PDN), which did little to inspire confidence despite its reassurances rumours of moves by the Namibian Government to take equity stakes in mining companies or projects in the southern African country were only that.
Paladin owns 75% of the Langer Heinrich uranium mine, which is set to come out of care and maintenance in the first quarter of next year.
Need somewhere to bury your head in the hot, scorching sand?
Enjoy some dividends in the form of a couple of bulk miners.
First up is Champion Iron (ASX:CIA), which will pay a C10c dividend to Canadian and Australian investors after a record production quarter from its Bloom Lake iron ore mine in Labrador.
Bloom Lake produces 66% Fe content iron ore which attracts a high grade premium, and is on track to become a 15Mtpa producer after a major expansion was completed last year.
Its output lifted 4% QoQ and 65% YoY to 3.1Mt (wet) of 66.1% iron ore concentrate for the three months to March 31 after hitting commercial production on its expansion in December.
CIA, which reports on an April to March basis, sold a record 10.6Mt of con over the past 12 months, up from 7.7Mt a year earlier, generating C$493.2m in EBITDA and C$200.7m in income for the year to March 31.
That came on revenue of C$1.3951 billion, down from C$1.4608b, with EBITDA falling from C$925.8m and net income off from C$522.6m a year earlier.
Those falls were largely due to lower realised prices and higher costs. C1 cash costs rose from US$47/dmt to US$55.9/dmt year on year in FY23, with both inflationary pressures and the now completed capital expenses on the Bloom Lake expansion playing a role.
“The Company expects those costs to decrease and to normalise as production gradually ramps up towards Bloom Lake’s expanded production nameplate capacity of 15 Mtpa,” CIA says.
Also paying out today is Terracom (ASX:TER).
The small Queensland coal miner, which rode last year’s coal boom like Steph Gilmore on a gnarly wave, announced a 3c per share quarterly payout.
It has taken the company’s returns this financial year to $244m or 20.5c per share, a remarkable yield of around 40%.
It may be slightly slimmer pickings for coal miners in the months to come. Front month Newcastle coal prices have tumbled to US$135.10/t having climbed as high as US$450/t last year, while metallurgical coal prices are around US$230/t, 2.5x below post-Russia Ukraine invasion highs.
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