PERTH (miningweekly.com) – Gold miner St Barbara on Thursday confirmed it had received a rival bid from ASX-listed Silver Lake Resources for its Leonora assets.

St Barbara and fellow-listed Genesis Minerals in April unveiled a A$600-million alternative proposal that would see Genesis acquire St Barbara’s Leonora assets, in Western Australia, in lieu of the previous Hoover House merger agreement.

Instead, the asset purchase agreement would give Genesis control of St Barbara’s Leonora assets for an up-front cash payment of A$370-million; the issue of 147.8-million shares in Genesis, valued at A$170-million; and an additional 52.2-million shares in Genesis, valued at A$60-million, contingent on Tower Hill achieving first production.

St Barbara on Thursday said that it had, in late April, received an unsolicited, non-binding, indicative and conditional proposal from Silver Lake, offering A$732-million for the Leonora assets, comprising a A$326-million cash consideration and a Silver Lake scrip consideration comprising 327.1-million new shares in Silver Lake at an implied value of A$406-million.

The net after-tax value of the indicative proposal, after allowing for the break-fee payable to Genesis, is estimated at A$668-million.

The Silver Lake proposal was subject to a number of conditions, including a due diligence, Silver Lake obtaining a $150-million debt facility from Taurus Mining Finance Fund, and final board approvals.

St Barbara told shareholders that it had requested additional information from Silver Lake over the assumptions, terms and conditions, and the basis of the non-binding, indicative and conditional proposal, and based on the responses received to this request had concluded that the terms offered by Silver Lake did not constitute a superior proposal to the Genesis transactions, and did not satisfy the "fiduciary out" exceptions to the no talk and no due diligence obligations under the Genesis transaction.

St Barbara said that factoring in the break fee of A$5.4-million payable to Genesis, the Silver Lake proposal only represented a 9% premium in value to the Genesis transaction. Furthermore, St Barbara said that Silver Lake had not provided any reasonable or quantitative assumptions to support its proposed offer price.

The gold miner also highlighted the lack of synergies and strategic fit between St Barbara and Silver Lake, in contrast to the significant synergies offered by the Genesis deal, also noting that under the Silver Lake proposal, St Barbara would have significantly less cash to fund its obligations and capital requirements, post transaction.

St Barbara told shareholders that it would not be engaging further with Silver Lake, and that its agreement with Genesis remained in full force.