Last Wednesday Kin revealed it had acquired 20 million shares in Dacian via on-market purchases, giving it a stake of 1.63%.
“The Kin board considers that accumulating a significant interest in one of the participants in the consolidation of the Leonora mining district, that is currently unfolding, is a sensible strategic move and that the current market price of Dacian shares represents good value,” Kin said last week.
Today, a substantial holder notice was lodged by Kin, Deutsche Balaton, Delphi and associates, which now have a combined 5.1% stake of Dacian.
The German companies hold 32% of Kin.
A subsidiary of Deutsche Balaton started buying Dacian shares on-market in the second week of August, paying as much as 11.2c per share.
Dacian is subject to a scrip takeover offer from Raleigh Finlayson’s Genesis Minerals.
Genesis is tightening its grip on Dacian, yesterday reporting it had reached an interest of just over 74%.
The offer was due to close on Monday this week but has been extended for a further two weeks to October 17.
Once Genesis reaches 90% of Kin it can move to compulsory acquisition.
The intention of Kin and the Germans remains unclear.
“Plenty of sub-plots playing out here,” Argonaut analyst Royce Haese said.
“Both Kin and Genesis are reliant on infrastructure to monetise their ore, with Genesis comfortably in pole position but a few more turns in the track to navigate.”
At the same time, Genesis is in talks with main Leonora player St Barbara, while St Barbara and Red 5 are now in discussions.
Kin holds the 1.4 million ounce Cardinia gold project, which sits between Genesis’ 2 Moz Leonora gold project and Dacian’s recently mothballed Mt Morgans operation.
St Barbara owns just over 15% of Kin and made an unsuccessful approach to the junior last year.
St Barbara believes consolidation in the region could create a 500,000-800,000 ounce per annum gold producer within two years with at least 10 years of mine life.
The top end of that production range would make an enlarged Leonora producer the third-largest gold producer on the ASX behind Newcrest Mining and Northern Star Resources.
Kin shares were up 2.8% to 7.3c, valuing it at around $80 million, while Dacian is worth almost $115 million at current prices.
Genesis has a market capitalisation of $335 million, Red 5 is capped at $425 million and St Barbara is currently worth $630 million.
