Just days out from the annual Diggers and Dealers mining conference in Kalgoorlie, Westgold Resources is coming into focus for many in the market.
The Wayne Bramwell-run Westgold purchased a 15 per cent stake in New Murchison Gold and many think the time could soon be right for Westgold to make an approach for the business as it remains in search of more production.
A deal would not involve Westgold stumping up a substantial amount of cash and could be the solution to topping up production for its Bluebird Mill in the Murchison area, which has capacity to process 1.8 million tonnes of gold per annum.
Currently, the ore from its own projects is under the mill’s capacity.
New Murchison Gold operates in the Murchison gold mining region in Western Australia and has the Crown Prince Deposit, which is expected to produce 226,000 ounces of gold per annum from September.
It raised $15m last year after receiving mining approvals and made a final investment decision for the project.
The $2.6bn Westgold last year embarked on a $2.2bn merger with Canadian miner Karora in a deal that saw the business dual listed in both Australia and Toronto.
Earlier, Ramelius Resources was in talks to buy Karora, but Ramelius instead purchased Spartan Resources for $2.4bn.
The Karora deal transformed Westgold into a miner producing 500,000 of gold per annum at a time that the price of the commodity has been trading at record highs.
Before the transaction, Westgold was producing about 220,000 ounces of gold from its underground and open pit mines in Western Australia and said at the time it was capable of producing 400,000 of gold per annum from Western Australia assets.
The Beta Hunt underground mine, 600km from Perth, was the jewel in Karora’s crown with its gold potential.
The talk of further industry consolidation comes after Gold Road Resources was bought by its joint venture partner on its key assets, South Africa’s Gold Fields, while Northern Star bought De Grey Mining.
Earlier North American miner Newmont bought Australia’s largest gold miner Newcrest Mining.
Add your comment to this story
BGC stops clock on sale of bricks unit
Perth-based building materials group BGC is understood to have pushed back the sale of its bricks unit until next year.
ADNOC looked at Santos LNG assets before buyout bid
The Abu Dhabi National Oil Company was initially in talks with Santos about buying assets in the business before it launched a $30bn all-of-company buyout with backers.
To join the conversation, please log in. Don't have an account? Register
Join the conversation, you are commenting as Logout