Regis Resources taps Greenhill for Ravenswood bid

Aerial view of the Ravenswood Gold mine in Queensland.

Regis Resources has tapped investment bank Greenhill for its pursuit of the $2bn Ravenswood gold mine that is up for sale through EMR Capital and Golden Energy.

First round bids for the Queensland asset are due later this month in a contest that will see Australian miners go up against foreign suitors for one of the country’s most valuable assets producing the precious metal.

Other Australian miners taking a look are Evolution Mining and Gold Road Resources.

Evolution has signalled that more acquisitions are not on its agenda, but experts say it could offloading its tier two mines like Mungari in Western Australia and Canada-based Red Lake and buying something higher up the value chain.

Sources believe overseas suitors will be most motivated to buy Ravenswood.

While the US-based Greenhill has hitched its wagon to the Jim Beyer-led Regis, Deutsche Bank is also believed to be close to the action, searching for a bidder to help finance, but it is yet to commit to any one group.

In the less likely event that the mine does sell to an ASX-listed company, funding a deal would not be a problem. Many including Regis are cashed up, and investors are than prepared to pile into equity raisings for gold miners at a time when gold is trading at record high prices.

Regis, which held takeover talks with Gold Road Resources last year, has just locked in a $300m term loan after paying down another loan of the same size early. One question is how long Mr Beyer will be at the helm, which may have a bearing on whether it makes a play for a major mine.

Global outfits in the mix include Chinese bidders like Zhojin, the buyer of the Australian-listed west African gold producer Tietto Minerals last year for $733m, and Shanghai-listed Chifeng, which purchased the Bibiani Gold Mine in Ghana from the Australian-listed Resolute Mining for $US105m in 2020. That came two years after buying the Sepon gold copper mine in Laos from MMG.

Indonesia’s Salim and United Tractors are also possibilities.

Advisers will be crunching the numbers on how to price the asset, with about 300,000 ounces of gold hedged at a price below the current gold price, which some estimate could shave a few hundred million dollars from the sale price.

EMR Capital, a private equity firm, is considered a keen seller looking to return funds to ­investors.

Azure Capital and UBS are working on the sale of Ravenswood, which generates about 200,000 ounces of gold annually and is based 130km south of Townsville.

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 that was needed for the mine’s life extension to at least 15 years from 2022.