St Barbara shares surged 8.49% today to close at 89.5 cents. The Genesis Minerals share price also gained 1.25%. For context, the S&P/ASX 200 Index (ASX: XJO) rose 0.25% today.
So what could be going on?
St Barbara merger speculation emerges
Investors appear to be buying up St Barbara shares amid speculation other gold miners could be interested in gaining exposure to the company.
St Barbara operates the Gwalia mine and processing plant in the Leonora region of Western Australia, near Kalgoorlie.
On Monday, Genesis Mining revealed to the market it is in discussions with St Barbara. However, The Australian reported there is a risk other competitors may also be interested.
St Barbara achieved gold production of 61,819 ounces in the third quarter of FY22.
Genesis released news of its talks with St Barbara as part of an announcement regarding a takeover offer of Western Australian explorer Dacian Gold on Monday.
The company highlighted it has restarted talks with St Barbara regarding “further consolidation in the Leonora District”. Genesis said:
There can be no assurance, however, that these discussions will lead to a transaction being concluded with St Barbara.
Meantime, St Barbara yesterday confirmed it is in talks with Genesis. St Barbara noted the discussions relate to possible synergies in the Leonora region of Western Australia. However, it said these discussions are unrelated to Genesis’ merger with Dacian Gold Limited. St Barbara added:
These discussions are regarding a potential business combination aimed at consolidation of the Leonora Province and the unlocking of operating and development synergies in the region and are independent of the potential transaction and capital raise referred to by Genesis.
St Barbara share price snapshot
St Barbara shares lost nearly 52% in the past year, while they have shed nearly 39% year to date.
In contrast, the S&P/ASX 200 Index has lost about 9% in the past year.
St Barbara has a market capitalisation of about $730 million based on the current share price.