Key Highlights

• Genesis said in its report that it agreed in the quarter to acquire 100 per cent of Vault via a scheme of arrangement.

• In the September 2026 quarter, gold sales were 71,594 ounces for Revenue of A$422.5 million.

• Closing ore stockpiles were 2.0 million tonnes at 0.9 grams per tonne, containing about 57,000 ounces.

• Production is expected at 270,000 to 300,000 ounces, AISC at A$2,750 to A$3,050 per ounce, with second-half AISC expected to be lower than the first half.

How does a gold producer with no hedging, rising unit costs and a large pending Merger keep its growth plans on track? Genesis Minerals' (ASX:GMD) September 2026 quarterly report, released to the ASX on 22 October 2026, offers a detailed answer. The Western Australian miner produced 72,107 ounces of gold, sold at an average A$5,902 per ounce, and finished the quarter with net cash of A$398.0 million. At the same time, it is preparing for a scheme of arrangement to acquire all of Vault Minerals, with a Shareholder vote scheduled for 11 November 2026.

The central development: the Vault merger

Genesis said in its report that it agreed in the quarter to acquire 100 per cent of Vault via a scheme of arrangement. The two companies announced the merger agreement on 14 July 2026, and the scheme booklet was released on 6 October 2026. Genesis estimates potential post-tax, undiscounted synergies of about A$2.0 billion. The combined group would have pro forma production of about 625,000 to 675,000 ounces a year, resources of 33 million ounces and reserves of 9.3 million ounces, according to the company.

Indicative dates in the report are a scheme meeting on 11 November 2026 and implementation on 26 November 2026, both subject to shareholder and Court approval. A long-term strategic plan for the combined Business is targeted for the June quarter of 2027. Genesis also warned that merger accounting will add non-cash charges that may reduce statutory net profit and EBIT margins, which matters for anyone comparing reported and underlying Earnings after completion.

How the business makes money

Genesis is a pure gold producer centred on the Leonora and Laverton districts of Western Australia, where ore from several underground and open-pit sources is processed through its mills. Revenue is therefore driven by ounces sold multiplied by the Australian-dollar gold price, less the All-In Sustaining Cost (AISC) of production.

In the September 2026 quarter, gold sales were 71,594 ounces for revenue of A$422.5 million. AISC was A$2,966 per ounce, compared with A$2,797 in the June quarter. On those two figures alone, the gap between price and cost was above A$2,900 per ounce, which explains the cash generation. Mine Operating Cash Flow was A$213 million, and net mine cash flow was A$162 million after A$51 million of growth capital.

Operating performance and balance sheet

Production edged up from 70,800 ounces in the June quarter. The company noted that wet weather constrained the Admiral mine, Gwalia grades were lower than in the June quarter and open-pit Mining at Hub is complete. Closing ore stockpiles were 2.0 million tonnes at 0.9 grams per tonne, containing about 57,000 ounces.

Cash and equivalents rose to A$598.0 million at 30 September 2026 from A$520.1 million at 30 June, after an underlying cash build of A$157.4 million. Bank Debt was A$200 million, with a further A$100 million undrawn, and asset finance liabilities were A$84 million. Genesis delivered its final hedge collars at A$4,235 per ounce and is now unhedged, so it has full exposure to the spot gold price in both directions.

Unaudited underlying net profit after tax was reported as A$120 million to A$130 million for the quarter. A maiden fully Franked Dividend of 5 cents per share, about A$59 million, was paid on 5 October 2026. An income tax catch-up payment of A$100 million to A$120 million is expected in the December quarter, so cash is likely to fall then; that is a timing item the company has flagged, not an operating deterioration.

Guidance and growth projects

FY27 guidance on a stand-alone basis is unchanged. Production is expected at 270,000 to 300,000 ounces, AISC at A$2,750 to A$3,050 per ounce, with second-half AISC expected to be lower than the first half. Growth Capital is A$380 million to A$420 million, which includes A$140 million for the Tower Hill mill. The company noted that the Vault merger would make that mill unnecessary, which would change the capital plan if the deal completes. Exploration is budgeted at A$80 million to A$90 million, with A$19.9 million spent in the quarter.

Among projects, first ore at Tower Hill is on track for FY28, with early mining ahead of schedule. Tower Hill reserves were updated on 5 May 2026 to 4.4 million ounces. First ore at Bruno Lewis is on track for the December 2026 quarter, and rail laying at the Leonora Rail Terminal is described as imminent.

Sector and competitive position

Genesis competes with other mid-tier Australian gold producers for labour, contractors and diesel, and for Acquisition targets in Western Australia's goldfields. The Vault deal is a consolidation move in that context. What can be said from the filing is that an AISC just under A$3,000 per ounce against a realised price near A$5,900 produces substantial margins at current gold prices, and that those margins would narrow quickly if the gold price fell.

Risks and what to monitor

Cost Inflation is one risk. FY27 guidance assumes diesel at A$1.60 per litre against a Spot Price of about A$1.76 per litre in the report, and each 10 cent move is roughly A$11 per ounce of AISC. The company said operations were not currently affected by Middle East Supply disruption.

Merger execution is the other: shareholder and Court approvals, timing, integration and the provisional purchase price allocation, which could affect reported earnings. Being unhedged adds gold-price risk. A stamp duty payment of about A$32 million relating to the Magnetic acquisition is expected in 2027.

Dates to watch include the 11 November 2026 scheme meeting, 26 November 2026 implementation, the December quarter tax payment, Bruno Lewis first ore, the exploration update and the combined strategic plan targeted for mid-2027.