Gold Road Resources eyes Canada’s Greenstone Gold Mines

The gold price has rallied 28 per cent over six months and hit a record high of $US2395 an ounce on Friday.

Speculation is mounting that the $2bn Gold Road Resources could be eyeing the $1bn-plus Greenstone Gold Mines business in Canada as it moves to capitalise on the record high gold price.

The gold price has rallied 28 per cent over six months and hit a record high of $US2395 an ounce on Friday.

It is believed that should Australian-listed Gold Road buy Greenstone, it would be accompanied by a monster capital raising.

However, while the company did not comment on speculation, it says its current focus is on recovering from recent rain events, and more generally, lifting the operating performance of its Gruyere asset.

Advisers Goldman Sachs and Gresham are believed to have been close to Gold Road Resources over time and if it embarks on a deal they will probably be close at hand.

DataRoom reported last year that the Royal Bank of Canada had been drafted to sell Greenstone on behalf of Orion Mine Finance, which owns 40 per cent of the business. The rest is owned by Equinox Gold.

The business is involved in the development of the Hardrock Project and the Kengamisis, Brookbank and Viper Properties.

Gold Road Resources has been open about its interest in an acquisition in Canada.

The Greenstone assets are pre-development.

Sources say Gold Road would be comfortable with Equinox retaining its interest, given that Gold Road has a record of owning non-controlling interests in gold miners.

Gold Road Resources is run by Duncan Gibbs. Its main asset is a 50 per cent interest in the Gruyere gold mine in Western Australia that it owns in conjunction with the mine’s operator, Gold Fields.

Gold Road also owns 19.9 per cent of Australian listed gold miner De Grey Mining, and for some time there have been suggestions it is a buyer, but there’s no deal for now.

Gold Road inherited a 15 per cent stake in De Grey Mining after in 2022 launching a $308m takeover of DGO Gold, which originally had the De Grey holding and later purchased more shares.

The Greenstone projects are located in Ontario and made up of several groups of claims with a cumulative strike length of more than 105km along the district’s most prospective geological structures.

A deal would follow hot on the heels of West Gold Resources’ acquisition of Canada-listed Karora Resources, which owns Australian assets, for $1.1bn last week.

Earlier, Gold Road weighed an acquisition of a $1bn stake in the Tropicana gold mine when it was being sold by IGO in 2021 (it was bought by rival Regis Resources).

It has said in the past that “value accretive transformational mergers and acquisitions” are part of its strategy to create shareholder value, in a quest to gain an ongoing revenue stream from gold production.