KALGOORLIE SUPER PIT ON MARKET
AUSTRALIA’S most iconic gold mine, the Kalgoorlie Super Pit, is on the market after Canadian miner Barrick Gold announced it will sell its 50pc share in the mine.
In a conference to investors, Barrick chief executive Mark Bristow said that the company was unhappy with the mine’s performance, and not comfortable being the non-operational partner in the mine.
Barrick said that the sale was in line with its strategy of selling off non-core assets that didn’t meet key criteria.
Mr Bristow said that while it continued to be a valuable asset, it was the “only asset in the 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 an asset that we own.”
This is not Barrick’s first attempt to sell the mine.
In 2017, a deal with Chinese company Minjar fell through after it failed to raise the $1.3b required.
The deal would be tempting to many of the cashed-up Australian miners riding the highs of the gold price spike as it has soared past $2250/oz.
However, analysts have advised caution.
While Barrick’s and Newmont’s last round of asset sales led to a transformative round of M&A’s for Australian companies such as Northern Star and Saracen Minerals between 2013 and 2015, record gold prices mean the price on assets is not likely to reflect the long-term price of gold.
Newmont Goldcorp, which owns the other 50pc of the Super Pit, has long stated that it would buy out Barrick’s half for the right price.
China’s fourth biggest producer, Zhaojin International Mining, could also be a contender, after entering into a joint venture with Perth-based PCF Capital to explore WA gold assets.
Barrick reported that production at the Super Pit was up 4pc from the previous quarter to 57koz, due to higher grade ore offsetting lower recovery.