GMD: Acquisition of Dacian Gold and Capital Raising

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Not for release to US wire services or distribution in the United States

5th July 2022

Acquisition of Dacian Gold and Capital Raising

Genesis continues to evaluate sensible regional consolidation opportunities in the

world-class Leonora District

HIGHLIGHTS

• Genesis to acquire Dacian Gold Limited (Dacian) via a unanimously recommended conditional off-market takeover offer (Offer)
• Under the Offer, Dacian shareholders to receive 0.0843 Genesis shares for each Dacian share they hold, representing a premium to Dacian shareholders of1:
• • ~33% based on 5 day VWAP of Dacian and Genesis
  • ~28% based on 10 day VWAP of Dacian and Genesis
• Implied offer value of $0.102 per share2 and implied equity value of A$111m for Dacian3
• The acquisition of Dacian, if completed, will achieve sensible regional consolidation by combining the natural pairing of Genesis' organic growth and high-grade Resources with Dacian's large-scale strategic milling infrastructure at Mt Morgans
• Genesis intends to conduct a strategic review of Mt Morgans in the December half of 2022; potential outcomes include:
• • Process stockpiles, followed by care and maintenance
  • Regional consolidation / operation synergies = Keep milling
  • Re-startmining post a more accommodative cost / labour backdrop in Western Australia
• The combined group4 will have:
• • ~4.5Moz in Resources exclusively in the world-class Leonora district, with a focus on growth through exploration and a pathway to production through the existing milling solution
  • the financial capacity, operational experience and exploration expertise to continue to grow the existing Mineral Resource, and to bring the combined assets back into production in due course, in order to maximise value to both sets of shareholders
• Dacian's Directors intend to unanimously recommend Dacian shareholders accept the Offer, in the absence of a superior proposal
• The Offer will be subject to a 50.1% minimum acceptance condition and other minimal and market standard conditions
• Dacian shareholder Perennial has entered into a binding pre-bid acceptance agreement over approximately
  76.4 million Dacian shares (representing approximately 7% of current Dacian issued shares)

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• Genesis to subscribe for approximately 123.9 million fully paid ordinary shares in Dacian under a conditional placement for cash consideration of ~A$12.6m (Dacian Placement), with the proceeds to fund Dacian's Jupiter extension drilling, exploration activities, and general working capital. This placement (if completed), together with the pre-bid acceptance agreement, will give Genesis a ~16.6% interest in Dacian
• Genesis has received firm commitments to raise up to $100m (before costs) through a two-tranche placement, to fund (assuming successful completion of the Offer) Ulysses development, exploration activities for the combined group's assets, fund the Dacian Placement, and for other general working capital purposes (Capital Raising).
• Placement strongly supported by institutional and professional investors, including Australian Capital Equity Pty Ltd and Northern Star Resources Limited, among others. In addition, the Genesis Board (including incoming Chair) and Management have agreed to subscribe for ~$2.7m in aggregate in the Capital Raising5
• Genesis continues to evaluate numerous regional opportunities. Discussions with St Barbara have recommenced and are ongoing regarding potential opportunities for further consolidation in the Leonora District. There can be no assurance, however, that these discussions will lead to a transaction being concluded with St Barbara
• A teleconference on this release will be held today, commencing at 11am AEST. The call can be accessed
  at:https://s1.c-conf.com/diamondpass/10023311-dhye7d.html

Genesis Minerals Limited (Genesis or the Company) (ASX:GMD) is pleased to announce its intention to acquire Dacian Gold Limited (ASX:DCN) (Dacian) by way of a unanimously recommended off-market takeover bid by Genesis for all of the fully paid ordinary shares in Dacian (Dacian Shares) (Offer).

Under the Offer, subject to the satisfaction or waiver of the conditions set out in Annexure A to this announcement, Dacian Shareholders will be entitled to receive 0.0843 fully paid ordinary shares in Genesis (Genesis Shares) for every 1 Dacian Share held (Offer Consideration). Based on Genesis' last closing price on 1 July 2022 of $1.205, the implied value of the Offer Consideration is $0.102 per Dacian Share. This exchange ratio represents a substantial and attractive premium of:

• ~33% to the 5 day volume weighted average price (VWAP) of Dacian Shares of $0.082 and Genesis Shares of $1.296 on and inclusive of 1 July 2022 (being the last trading day before Dacian and Genesis entered a trading halt); and
• ~28% to the 10 day VWAP of Dacian Shares of $0.087 and Genesis Shares of $1.326 on and inclusive of 1 July 2022

The Offer extends to all Dacian Shares currently on issue, and those issued during the Offer period as a result of the exercise of currently issued options or performance rights.

Strategic rationale

Genesis is an advanced ASX gold explorer and developer in the Leonora region with a March 2022 Resource of 39.3Mt @ 1.6g/t for 2.0Moz Au. The Resource includes one of the highest-grade ore sources in the region, with a high-grade portion at Ulysses of 1.8Mt @ 6.4g/t for 363koz Au. Genesis has significant upside with all deposits remaining open along strike and at depth, and limited deeper drilling completed across entire belt.

Genesis is led by a highly experienced board and management team including former Saracen Minerals executives Raleigh Finlayson (Managing Director), Morgan Ball (CFO), Lee Stephens (Operations) and Troy Irvin (Corporate Development).

Genesis believes there is strong strategic logic in the combination of Genesis and Dacian's assets. The merger would effect a consolidation of nearby high-grade Resources with existing infrastructure, and create a new mid-capASX-listed gold

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company with enviable strategic optionality, including further regional consolidation opportunities. The merged group would have a clear pathway to production as well as other strategic options, given existing infrastructure, enhanced scale of Resources, exploration upside, a robust balance sheet, and a management team with a strong track record of delivery.

Should the Offer be successful, Genesis intends to focus on exploration work to grow Resources at Genesis and Dacian's assets in the Tier 1 Leonora district, and to work to re-define a robust restart life of mine plan for the combined operations.

Genesis Managing Director Raleigh Finlayson said: "This transaction is the first step towards our vision of building the premium Australian gold miner, targeting +300,000 ounces per annum of sustainable, high quality gold production.

"Sensible M&A is a key component of our multi-pronged growth strategy, and our team has a strong track record of executing transactions that deliver outstanding value for shareholders. Consolidation of the world-class Leonora District is a natural fit for Genesis.

"The complementary nature of the combined Company's significant Resources and infrastructure, exploration upside, and other regional growth opportunities make this the right deal for both Genesis and Dacian shareholders".

"We intend to conduct a strategic review of Mt Morgans over the next six months which will provide an opportunity to re-set strategy without immediate mining pressure in a challenging inflationary environment. Genesis will have the time and funding to grow the combined Resources and Reserves, optimise a new mine plan and await a more accommodative cost backdrop before an eventual re-start of full-scale operations".

Key benefits for Dacian Shareholders

The benefits of the Offer to Dacian Shareholders include:

1. Highly attractive premium
2. • The implied value of Offer Consideration represents an attractive and substantial premium to recent trading in Dacian shares
3. Opportunity to become a shareholder in Genesis led by an outstanding management team with a proven track record
4. • Dacian Shareholders who decide to retain Genesis shares forming part of the Offer Consideration will become shareholders in an advanced gold explorer and developer with a proven management team and a track record of growth and shareholder returns
   • Dacian Shareholders will have continuing exposure to the enlarged Genesis group which will benefit from the strategic consolidation of its high grade Ulysses ore with the nearby existing large scale Mt Morgans mill
5. Genesis' Offer is subject to minimal conditions
6. • Genesis' Offer is subject to minimal and market standard conditions, including (among other things) a 50.1% minimum acceptance condition, completion of the Dacian Placement, no material acquisitions or disposals, no material adverse change and no prescribed occurrences in relation to Dacian. The full conditions of the Offer are set out in Annexure A to this announcement
7. Reduce likelihood of future funding requirements and associated dilution risk
8. • Assuming Genesis completes its A$100m Capital Raising (described further below), Genesis will have a 30 June 2022 pro-forma cash balance of ~A$116m and no debt6.

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• The strength of the merged group's balance sheet will reduce the likelihood or requirement for Dacian to raise further capital in the future to fund operations or ongoing exploration programs, which would likely have associated dilution impacts to Dacian shareholders7

5. Potential opportunity to benefit from Capital Gains Tax (CGT) scrip for scrip rollover relief in relation to Offer Consideration

• If Genesis acquires at least 80% of Dacian Shares under the Offer, CGT rollover relief may be available to Dacian Shareholders in relation to the Offer Consideration

Support from Dacian Directors

The board of Dacian intends to unanimously recommend that Dacian shareholders accept the Offer in the absence of a superior proposal.

Pre-bid acceptance

Genesis has secured support for the Offer by way of a pre-bid acceptance agreement with Dacian shareholder Perennial Value Management Ltd for approximately 76.4 million Dacian shares, giving Genesis voting power of approximately 7.0% in Dacian based on current Dacian ordinary shares on issue.

Dacian Placement

Genesis has entered into a conditional placement agreement with Dacian to acquire a ~10.2% interest in Dacian (Dacian Placement Agreement)

Under the Dacian Placement Agreement, Genesis will subscribe for 123,910,441 Dacian Shares for cash consideration of ~A$12.6m. The issue price for the Dacian Placement is A$0.102 per Dacian Share, which is equivalent to the implied value of the Offer Consideration for one Dacian Share as at 1 July 2022 (being the last trading day before Dacian and Genesis entered a trading halt). The proceeds of the Dacian Placement will be used to fund Jupiter extension drilling, exploration activities, and general working capital for Dacian.

The Dacian Placement is conditional on Genesis receiving all funds under Tranche 1 of the Capital Raising (see below). The Dacian Placement is not subject to the approval of Dacian Shareholders or completion of the Offer.8

When combined with its interest under the pre-acceptance agreement described above, the Dacian Placement (if completed) will give Genesis voting power of ~16.6% in Dacian.

Offer conditions

The Offer is subject to minimal and market standard conditions, including (among other things) a 50.1% minimum acceptance condition, completion of the Dacian Placement, no material acquisitions or disposals, no material adverse change and no prescribed occurrences in relation to Dacian.

The full conditions of the Offer are set out in Annexure A to this announcement.

1. Assumes Genesis acquires 100% of Dacian pursuant to the Offer. The Offer is subject to a 50.1% minimum acceptance condition. If this condition is satisfied or waived, but Genesis does not acquire a 90% interest in Dacian, it will be unable to compulsorily acquire the remaining Dacian Shares. In this scenario, Dacian will remain a separate company, but will be consolidated by Genesis and have Genesis nominees appointed to its board. In these circumstances, the nature of any future Dacian capital raising will be determined by the Board of Dacian. To the extent Genesis is unable or unwilling to participate in such capital raising by Dacian, funds raised in the Capital Raising may be re-allocated for the development and exploration of Genesis' assets or for working capital purposes in Genesis' absolute discretion.
2. The Dacian Placement Agreement can be terminated by either party if the Dacian Placement is not completed by 31 July 2022 or such later date as agreed by the parties.

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• Mick Wilkes will resign from the board of Dacian and will be invited to join the Genesis board;
• Dacian and its group entities will appoint to their respective boards a majority of Genesis directors;
• Tony Kiernan will join the board of Genesis as Non-Executive Chair; and
• Current Genesis Non-Executive Directors Tommy McKeith and Nev Power will resign from the Genesis board.
  Capital Raising

Genesis has received commitments from institutional and sophisticated investors to raise up to $100 million (before costs) (Capital Raising). The Capital Raising will be in two tranches, and will comprise the issue of approximately 83.0 million new Genesis Shares at an issue price of $1.205 per share.

The Capital Raising was strongly supported by institutional and professional investors, including Australian Capital Equity Pty Ltd and Northern Star Resources Limited, among others.

Genesis directors (including incoming Chair) and management have agreed to subscribe (in the case of directors, subject to shareholder approval) for approximately $2.7m of new Genesis shares in aggregate in the Capital Raising.

Funds raised under the Capital Raising will be applied as follows:9

• $67.4 million on the development of the Ulysses project and exploration activities for the combined group's assets;
• $12.6 million on the Dacian Placement; and
• $20 million for other working capital and general corporate purposes.

The Capital Raising comprises two tranches as follows:

• Tranche 1: an unconditional placement of approximately 37.8 million Genesis Shares to raise ~$45.6 million under Genesis' existing ASX Listing Rule 7.1 capacity; and
• Tranche 2: a conditional placement of approximately 45.2 million Genesis Shares to raise a further ~$54.4 million, which will include a conditional placement of approximately 1.6 million Genesis Shares to existing and incoming Genesis directors, subject to Genesis shareholder approval expected to be sought at an extraordinary general meeting expected to occur in September 2022.

The Offer does not contain any conditions relating to the Capital Raising, and the Capital Raising is not conditional on the outcome of the Offer.

The proposed Capital Raising represents approximately:

• ~32.9% of the current number of Genesis Shares on issue; and