The Kalgoorlie Super Pit is officially in play, and WA-based gold miner Northern Star Resources is “one of the frontrunners” to take control of part or all of the asset.
Canadian gold miner Barrick Gold officially placed its 50 per cent stake in the Super Pit on the market on Monday night as the company announced its June quarter results. Chief executive Mark Bristow told Bloomberg Barrick had no shortage of interest in the asset, which he described as an icon in the gold industry.
He also referred to Northern Star as one of the frontrunners among those companies that had expressed interest.
Market rumours have been rife for weeks and reached fever pitch at last week’s Diggers and Dealers Mining Forum in Kalgoorlie-Boulder that Northern Star was close to announcing a deal to buy either Barrick’s stake in the Super Pit or the asset as a whole.
The Super Pit lies near Northern Star’s existing Kalgoorlie operations and is considered to fit the company’s playbook for turning around old, unloved and underperforming assets. Mr Bristow on Monday added impetus to the speculation, suggesting the chief executive of Barrick’s joint-venture partner in the Super Pit, Newmont GoldCorp, was also amenable to a transaction.
“Gary (Goldberg) said to me depending on the price, he’ll sell it, buy it or partner it,” Mr Bristow reportedly told Bloomberg.
A spokesman for Newmont confirmed: “We would consider transactions to consolidate or divest our interest in KCGM under the right valuation terms”.
Earlier, Mr Bristow told reporters and analysts on a conference call its stake in the Super Pit was the only asset in the company’s portfolio which could be performing better. “Given we are not the operators, it does not fit with our filters as we do not want to be passive investors in assets that we own,” he said.
The announcement coincides with news China’s fourth-biggest gold miner, Zhaojin International Mining, is on the hunt for gold assets in WA.
The Hong Kong-listed entity on Monday struck a joint-venture agreement with Perth-based PCF Capital Group to source projects in the State.
PCF boss Liam Twigger noted Zhaojin had a market capitalisation of $5.5 billion, meaning it could consider opportunities “from all ends of the spectrum”.
No deal will be too big or too small,
Barrick reported gold production at Kalgoorlie was up 4 per cent on the previous quarter to 57,000 ounces in the three months to June 30.
The asset has been plagued by wall slips and geotechnical issues in recent times.
Chinese gold miner Shandong Tyan Home had emerged as a possible buyer of Barrick’s stake in the Super Pit through its locally based subsidiary Minjar Gold in 2017, but a reported $US1.3 billion deal failed to materialise.
Northern Star said yesterday it did not comment on merger and acquisition speculation.