Genesis Minerals Limited (Company) (ASX: GMD) is pleased to announce a planned strategic funding and Board restructure aimed at delivering extensive financial and management strength to grow Genesis into a mid-tier Australian gold company.
The proposal is led by highly regarded gold mining executive Raleigh Finlayson, formerly Managing Director of Saracen Mineral Holdings (ASX: SAR) and Northern Star Resources (ASX: NST). Under the proposal, which is subject to shareholder approval, Genesis will raise $16 million via a share Placement at 6c a share. Mr Finlayson will subscribe for $7 million of shares in the Placement and Northern Star will subscribe for $3 million of shares. The remainder of the Placement will be offered to existing and new institutional and sophisticated investors, including current and proposed Directors. Existing Genesis shareholders will have the opportunity to participate in a 1-for-30 non renounceable Entitlement Offer at 6c per share. Placement shares will qualify for the Entitlement Offer.
Shares acquired via the Placement and the Entitlement Offer will come with a free one-for-two attaching twoyear unlisted option exercisable at 10c. Placement options will not be able to be exercised to participate in the Entitlement Offer. Based on Genesis' closing price at 21 September 2021, the issue price for the Equity Raising represents a 17.8% discount to the last traded price of Genesis shares, and a 20.0% discount to the 5-day volume weighted average price of Genesis shares. Mr Finlayson will be appointed Managing Director of Genesis by no later than 31 March 2022.
Mr Finlayson has the right (subject to shareholder approval), upon appointment as Managing Director, to be issued 30 million performance rights under the Genesis Incentive Performance Rights Plan, which will have vesting hurdles tied to a 2.5Moz JORC Resource, a 1.0Moz JORC Reserve and Genesis becoming a gold producer (Performance Rights). Former FMG Managing Director and CEO Neville Power and highly experienced corporate lawyer Michael Bowen will be invited to join the Board as Non-Executive Directors following conclusion of the Placement. Each will be issued with 15m options at an exercise price of 10.5c with a four-year expiry (Director Options).
Tommy McKeith will continue as Non-Executive Chairman and Gerry Kaczmarek will continue as Non-Executive Director. Under the transition plan, Michael Fowler will remain Genesis Managing Director until Mr Finlayson's appointment becomes effective. At that time, Mr Fowler will retire from the Board. Current NonExecutive Director Craig Bradshaw will retire from the Genesis Board at the upcoming Genesis AGM. Genesis' largest shareholder, Alkane has advised Genesis that it strongly supports the strategic investment and Board changes. Non-Executive Director and Alkane representative Nic Earner will retire from the Board at the upcoming Genesis AGM, assuming all necessary shareholder approvals for the Placement and Board restructure are obtained. Alkane has also agreed to subscribe for any shortfall under the Entitlement Offer subject to scale back to ensure Alkane's voting power in Genesis does not exceed 20%. The key terms of that agreement are set out in Annexure 4. In addition, the 2019 Subscription Agreement between Alkane and Genesis, under which Alkane was provided with Board representation and certain other rights, will be terminated with effect from completion of the Entitlement Offer. Genesis would like to thank Alkane for its strong support as a shareholder over the past two years and Mr Earner for his contribution at a Board level. Shareholder approvals for the Placement, Alkane Subscription, Consultant Options, Performance Rights, Board appointments and Director Options will be sought at the forthcoming AGM. Genesis Chairman Tommy McKeith said the proposal was an outstanding opportunity for Genesis shareholders.
'Raleigh is a highly successful gold miner with an exceptional track record of creating value for shareholders, growing Saracen from a junior explorer and developer into a $6 billion company at the time of its merger with Northern Star,' Mr McKeith said. 'With Raleigh working alongside Neville, whose vast experience and achievements are widely acknowledged across the Australian business spectrum, and Michael, who is one of Perth's most highly regarded corporate lawyers, Genesis will have an enviable team in the Boardroom. The combination of their experience and the funding package will position Genesis to maximise the opportunities at the Ulysses project as well as consider value-enhancing strategic acquisitions.'
Subscribers in the Equity Raising will receive one (1) free attaching option for every two (2) shares subscribed under the Equity Raising. Each option will have an exercise price of $0.10, have a twoyear expiry and be unlisted. Mr Finlayson (or his nominee) is subscribing for $7 million of shares in the Placement pursuant to a Subscription Agreement, the key terms of which are outlined in Annexure 3. Northern Star Resources Limited has committed to subscribing for $3 million of shares in the Placement. Proposed directors Neville Power and Michael Bowen (or their nominees) are subscribing for $1,000,000 and $600,000 respectively under the Placement. Current Non-Executive Chairman Mr McKeith is subscribing for $225,000 of the Placement. The participation of all current and proposed directors of Genesis in the Placement is subject to Genesis shareholder approval at the AGM.
Mr Neville Power
Mr Neville Power was formerly the Managing Director and Chief Executive Officer of Fortescue Metals Group, one of the world's largest, lowest cost producers of iron ore, recognised for its unique culture, innovation and operational delivery. During his tenure, Fortescue more than quadrupled its production to over 170 million tonnes per annum and positioned itself as the lowest cost supplier of seaborne iron ore to China. Prior to joining Fortescue, Mr Power held Chief Executive Officer positions at Thiess and the Smorgon Steel Group adding to his extensive background in the mining, steel and construction industries.
Contact:
Paul Armstrong
Tel: +61 8 9322 6178
This announcement has been prepared for publication in Australia and may not be released to US wire services or distributed in the United States. This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or any other jurisdiction. Any securities described in this announcement have not been, and will not be, registered under the US Securities Act of 1933 and may not be offered or sold in the United States except in transactions exempt from, or not subject to, the registration of the US Securities Act and applicable US state securities laws.
About Genesis
Genesis is a Western Australian gold company focused on its 100%-owned Ulysses Gold Project, 30km south of Leonora and 200km north of Kalgoorlie in the world-class Leonora-Laverton gold district. Genesis holds a strategic 650km2 strategic footprint in this prolific gold province which covers numerous prospective yet under-explored mineralised trends.
Genesis is well funded allowing the Company to maintain an aggressive exploration program targeting the next leg of resource growth and discovery at Ulysses. The focus of ongoing drilling is to upgrade existing resources while continuing to systematically test for extensions of the known deposits at depth and along strike and searching for new discoveries. The Company has budgeted to complete at least a further 40,000m of Reverse Circulation and diamond drilling in the second half of calendar year 2021, in conjunction with over 20,000m of air-core drilling across the 15km long Ulysses-Orient Well corridor and 6km strike length of the Puzzle granitegreenstone contact. Royalties applicable to the Company's projects include a 1.2% net smelter royalty from the sale of products from the Ulysses deposit tenement after 200,000 tonnes of ore from the tenements has been toll treated, an effective 0.9% royalty from the sale of all naturally occurring substances from the Ulysses deposit tenement, and a 1% net smelter royalty on gold extracted from the Kookynie deposit tenements capped at $5 million.
GENESIS MINERALS LIMITED 
