Ravenswood gold mine sale gathering momentum

Ravenswood generates more than 200,000 ounces of gold annually. Picture: AFP

The $2bn-odd sale for the Ravenswood Gold Mine in Queensland is gathering pace in what is one of the largest processes under way for the start of 2025.

But suitors, who would have had to rush back from their summer break to get their offer in by the first week of February, have been provided a reprieve as the bid deadline has been pushed out by a couple of weeks.

The lead-up to the offer date would have coincided with celebrations for Chinese New Year, which this year falls on January 29 and, given the level of strong interest from buyers out of China, it posed a problem.

Two of the strongest contenders are Zhaojin, the Chinese group that purchased the Australian listed West African gold producer Tietto Minerals last year for $733m, and Chifeng.

Zhaojin makes sense, as it’s on the hunt globally for more gold, and experts believe that the Foreign Investment Review Board would be unlikely to take exception to it being an owner.

The privately owned Chifeng, meanwhile, is listed in Shanghai, and in 2020 it purchased the Bibiani Gold Mine in Ghana from the Australian-listed Resolute Mining for $US105m.

That came two years after buying the Sepon gold copper mine in Laos from MMG.

The lucrative Ravenswood mine, 130km south of Townsville, is one of the prized assets held by Owen Hegarty-chaired private equity firm EMR Capital.

EMR owns it jointly with Singapore-based Golden Energy Resources (GEAR), backed by money from Indonesia.

The hope is a sale nets the sellers at least $2bn in proceeds amid sky high gold prices.

And with global uncertainty still a feature in the market, there’s no sign of the gold price retreating anytime soon.

Creating competitive tension are also Australian gold miners, with Regis Resources, Gold Road Resources and Evolution Mining all understood to be looking.

Of those, market experts believe that the cashed up and debt-free Regis Resources to be the best placed.

Canadian and Indonesian buyers are also hanging around the hoop.

The looming deal has Australian mining bankers busily engaged for parties, with Gresham typically helping out Gold Road and Deutsche Bank believed to be providing funding for Regis Resources.

One name that features less in conversations about prospective buyers is South Africa’s Harmony Gold, which was believed to be interested early on.

Private equity firms are drawn to cash, which may see EMR look favourably on a cash buyer from overseas, but equally, a strong offer from an Australian group, which has the synergies that can justify a big cheque, would be appealing – even if it’s with scrip or subject to an equity raising.

Working in the favour of EMR Capital and GEAR is that the mine is one of the few of such quality and size, (it generates more than 200,000 ounces of gold annually), on the market and is based on the east coast.

In focus for buyers will be the mine’s hedge book at a time a number of groups have opted to close their books due to being out of the money.

Advising on the sale of Ravenswood are UBS and Azure Capital.

EMR Capital led a consortium that purchased Ravenswood in 2020 from Resolute Mining for up to $300m.

It has substantially grown its production since, through heavy investment which was needed for the mine’s life extension to at least 15 years from 2022.