Regis, United Tractors go head to head for Ravenswood gold mine

Ravenswood gold mine in Queensland is for sale through UBS and Azure Capital. Picture: AFP

The contest for the $2bn Ravenswood gold mine in Queensland is understood to have narrowed to just two suitors.

The final parties in the competition are believed to be Australian listed gold miner Regis Resources and United Tractors, based in Indonesia.

Speculation in the market is that China’s Chifeng is no longer in the race.

Working as an adviser to United Tractors is Standard Chartered, while Regis is working with Greenhill.

The share price of the ASX-listed Regis, worth $3.3bn, has rallied in recent months as the gold price trades at record prices, although both have retreated in recent days.

The company, led by Jim Beyer, has been eyeing acquisition opportunities in the past year as it positions itself for growth.

Mr Beyer over his career has had a reputation for being disciplined about price, although some shareholders at the time believed he may have overpaid for the Tropicana mine acquisition.

However, over time the deal has proved to be lucrative.

Regis purchased a 30 per cent stake in the Tropicana gold mine from IGO in 2022 for $900m.

If Regis ends up the buyer of Ravenswood, the company would likely need to raise equity.

Mr Beyer will no doubt need to strike the balance between ensuring that the company is well positioned for growth while staying disciplined on price.

The experienced mining executive has been in the top job at Regis for almost seven years, and there’s questions over how long he may want to continue at the helm of the gold miner.

An acquisition of Ravenswood means he likely stays around for some time longer to bed the deal down, but if he’s keen to exit, a M&A transaction would unlikely be on his agenda.

One solution could be a move into the chairman’s seat, replacing James Mactier who has been in the top boardroom position also for seven years.

Final offers for Ravenswood, up for sale by UBS and Azure Capital, are due in about a week.

Crimping demand has been the Ravenswood mine’s gold hedge book, which is said to be at least $300m out of the money on the back of the soaring price of gold, and some operational challenges at the mine.

But weighing in its favour is that gold has recently hit records prices beyond $5000 an ounce due to geopolitical uncertainty.

There are also few other quality gold assets for sale, other than the near-by Bellevue Gold, which Regis is expected to bid for if it misses out on Ravenswood.

Regis forecasted in its result that for the six months to December, 30 per cent of Tropicana’s production for the 2025 financial year was expected to be between 130,000 and 140,000 ounces.

In addition, it would achieve 220,000 to 240,000 ounces from its Duketon mine, 130km north of Laverton in Western Australia, which has been nearing the end of its life and subject to expansion work.

Regis is searching for growth after its McPhillamys project in NSW wound up needing more spending than anticipated, questioning whether it was viable to move forward with the development of what is one of Australia’s largest undeveloped gold deposits suitable for open pit mining.

Mr Beyer last year said Regis would not be in a position to approve McPhillamys until late 2025 or early 2026.

The Ravenswood mine, 130km south of Townsville in Queensland’s Charters Towers region, generates about 200,000 ounces of gold annually.

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

Its other owner is Singapore-based Golden Energy Resources.