Surging gold price prompts buyout interest in Vault Minerals

Vault’s shares are up 17 per cent since the start of this year but fell more than 4 per cent on Monday. Picture: AFP

At least two foreign parties are believed to be running the ruler over $2.8bn gold miner Vault Minerals for a potential buyout proposal as groups look to Australia to capitalise on the surging gold price.

DataRoom understands that the groups looking are out of Indonesia and north Asia.

The speculation comes just weeks after Indonesia’s United Tractors looked over the Ravenswood gold mine, owned by EMR Capital, but did not bid after making it through to the final stage of the sale process.

Sources had earlier told DataRoom that United Tractors had been looking at other opportunities Australia.

Any move on Vault is likely to be closely watched by Genesis Minerals, widely thought to be the most obvious candidate to buy the business.

Vault was subject to a merger with the $1.2bn gold miner Red 5 in 2024.

Although shares are up 17 per cent since the start of this year as the gold price has traded at new records above $5000 an ounce, they fell more than 4 per cent on Monday, closing at 38.5c.

There are synergies that can be achieved by bringing together Vault Minerals and Genesis Minerals, but the thinking is that the Raleigh Finlayson-led Genesis would likely be eager to pick up the business at a discounted price.

However, that plan could be thwarted if foreign groups move in on the target.

Vault has the Deflector gold and copper mine, 450km north of Perth, which produces about 139,000 ounces of gold, but is at the end of its life.

It also has the King of the Hills processing facility near Leonora, 900km northeast of Perth, where its mine operates, and a mine at Mount Monger.

A buyout of Vault would cap off a rush of gold sector mergers and acquisitions in Australia.

Northern Star finalised its purchase of rival listed gold miner De Grey Mining in May for $5bn, South Africa’s Gold Fields agreed to buy the Australian-listed Gold Road Resources for $3.7bn, with which it partners on its flagship Gruyere gold mine in Western Australia, while Ramelius Resources agreed to purchase gold miner Spartan Resources for $2.4bn.

Ramelius amassed a stake in its competitor a year ago, with 18.3 per cent, and there are strong synergies in bringing the two groups together.

Bellevue Gold is also testing interest for a sale through UBS, while EMR Capital recently shelved its sale process for the Ravenswood gold mine in Queensland.

Regis Resources was the final bidder, but its offer did not meet expectations, thought to be for more than $3bn.

Anticipation has been building for Australian-listed gold miner Regis to embark on a major transaction.

In the copper space, South Africa’s Harmony Resources agreed to buy MAC Copper a month ago for $1.6bn, and the Australian-listed copper miner New World Resources, which owns assets in the US, is currently in play.

Institutional investors in the gold mining sector have long lobbied for more consolidation, with too many smaller gold miners and the number thinning out at the top end of town.

However, social issues, including who would run the boards and management of a mooted merged entity, had prevented deals from happening.

Newcrest was previously by far Australia’s largest listed gold miner, but was swallowed by global rival Newmont in a $24bn buyout in 2023, leaving Northern Star as the next largest on the ASX.