Owen Hegarty’s EMR buys Golden Grove copper-zinc mine
The EMR Capital private equity firm run by Owen Hegarty has agreed to buy the Golden Grove copper and zinc mine.
The EMR Capital private equity firm run by Owen Hegarty has agreed to buy the Golden Grove copper and zinc mine in Western Australia from MMG for $US210 million ($291m), giving Mr Hegarty control of the mine for a second time.
The purchase, flagged in The Australian’s Dataroom column last month, comes after the Melbourne-based, Chinese-controlled MMG ran a four-month sales process to sell the mine.
“(MMG) has been considering the Golden Grove mine’s role in its broader mining asset portfolio,” MMG said. The sale, if finalised, would form part of the company’s wider plan to “optimise its mining asset portfolio”, it added.
Mr Hegarty’s Oxiana bought Golden Grove from Newmont for $265 million in 2005 and the mine’s ownership passed on to OZ Minerals when Oxiana merged with Zinifex in 2008.
It was then sold to MMG in 2011 when the Chinese company bought most of the OZ assets and the services of its chief executive Andrew Michelmore. At the end of last year, MMG had a book value of $US188.3m for Golden Grove.
Golden Grove is the second OZ asset that a company Mr Hegarty is associated with has bought from MMG, the second OZ asset that Melbourne-based EMR has purchased, and the third time a Hegarty-led company has been involved in the purchase of a former Oxiana asset.
In March, EMR led a consortium that secured a 95 per cent stake in the Martabe gold and silver mine in Indonesia for $US775m from G-Resources, which at the time had Mr Hegarty as its vice-chairman. Mr Hegarty was excluded from voting on the transaction and did not receive any money from G-Resources or EMR related to the deal.
G-Resources had acquired Martabe following its $US211m sale by Oz in 2009 to China-Sci-Tech, which had Mr Hegarty as vice-chairman.
Sci-Tech then onsold it to Smart Rich Energy, which renamed itself G-Resources, with Mr Hegarty as chairman.
The mid-sized Golden Grove mine produced a little over 24,000 tonnes of zinc in the three quarters to end-September and nearly 8100 tonnes of copper concentrate over the same period. Given the downturn in commodity prices the mine delivered a loss of $US21.7m in 2015 and a $US14.7m loss a year earlier.
MMG said the sale of Golden Grove was conditional on board approval and financier consents.
Completion of the deal is expected in February. Goldman Sachs advised MMG on the deal.
For MMG the sale comes ahead of the coming retirement of Andrew Michelmore, who has built the company’s mining business from Melbourne.
Mr Michelmore, 64, has said he will stand down by the middle of next year.
The former WMC and Zinifex chief became the founding chief of MMG in 2009 after it bought most of Oz Minerals’ assets.
To join the conversation, please log in. Don't have an account? Register
Join the conversation, you are commenting as Logout