The sales process for the Super Pit gold mine in Western Australia is gathering steam, as shortlisted bidders get ready to submit their final offers for the iconic asset by November 15.
Into the second round for a half-share of the $1bn-odd mine are believed to be Northern Star, Evolution Gold and China’s Zijin Mining, while the $3.16bn Saracen Mineral Holdings should not be discounted.
Barrick Gold is selling a 50 per cent stake in the asset through investment bank Credit Suisse.
The remaining interest held by Newmont Goldcorp is also expected to come up for sale.
Australian groups Evolution Mining and OceanaGold remain in the mix for the Red Lake gold mine in Canada, with bids due on Thursday.
That asset is expected to sell for about $500m.
Expectations are that Barrick’s 50 per cent interest in the Super Pit will sell for between $US300m and $US400m ($436m-$581m).
Northern Star is the frontrunner.
Should Northern Star or Evolution Mining buy the interest, an equity raising could be launched.
Barrick came close to selling its stake in the Super Pit in 2016 through Credit Suisse to China’s Shandong Tyan Home for $1.36bn, but the deal collapsed.
The 3.5km long, 1.5km wide Super Pit is Kalgoorlie’s biggest employer.
It skirts the southeast edge of the town and envelops the bulk of the so-called Golden Mile, the rich zone of gold mineralisation that sparked the original gold rush in the region in the 1890s. It dates back to the 1980s, when Alan Bond tried to amalgamate the many small underground gold mines in the area into a single large pit.
The mine produces about 800,000 ounces of gold a year.
It is operated by Newmont and has faced remediation problems.
Pre-emptive rights are held by both owners.
Mining merger and acquisition activity is expected to ramp up in the months ahead, with yesterday’s announcement of a takeover bid by Independence of Panoramic Resources offering evidence of more likely transactions.
Independence is offering $312m for the business.
In the mining services space, a party — thought to be Sigdo Koppers — is closing in on the Downer Mining division, which is up for sale through investment bank Macquarie Capital.
Some expect it to sell for around $500m.
Offshore and trade parties including Sigdo Koppers are also said to be in talks to buy CIMIC’s mining services business Thiess.
The enterprise is understood to generate about $500m in annual earnings and is up for sale through investment bank JPMorgan.
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