Global gold miner sells three WA assets

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 15 Oct 2013   Posted by admin


CANADIAN producer Barrick Gold has reached a settlement with Gold Fields Limited for the sale of three WA gold mines, just two months after announcing the assets would go to market.
In a deal worth US$270 million, Barrick Gold signed across the three primary mine sites from its Yilgarn South project, 23km south of Laverton, to the major South African gold developer in early October.
Inclusive of the prosperous Granny Smith, Lawlers and Darlot mines, the deal added about 400,000oz of gold output to Gold Field’s current Australian portfolio.
According to reports, Australia would become Gold Fields’ largest production hub, holding 42 per cent of the company’s total gold output.
Barrick chief executive Jamie Sokalsky stated that the assets were sold to decrease the company’s production costs, resulting from falling gold prices.
“The agreement to divest Yilgarn South demonstrates further progress and as we work to optimise the company’s portfolio and maximise free cash flow in line with our disciplined approach to capital allocation,” Mr Sokalsky said.
“I’d like to extend my gratitude and appreciation to our Yilgarn South employees, who have made a significant contribution to Barrick over many years.”
In a release, Barrick stated that Gold Fields opted to fulfil partial payment for the sale by delivering 28.7 million of its common shares, at a value price of US$4.70 per share, as permitted by the terms of the sale agreement.
Gold Field chief executive Nick Holland welcomed the additions to the company’s portfolio, stating the sale was “attractive, opportunistic and conservatively financed.”
“We are pleased to have completed this acquisition of in-production ounces,” he said.
“Today we commenced integrating these assets with our existing operations in WA where Gold Fields now has five active mines.
“We see a clear path to value and, once fully integrated, these assets are expected to have a positive impact on Gold Fields’ production, free cash flow and global credit rating.”
The three underground mines at Yilgarn South collectively held a substantial 2461koz of gold as of 2011, with Granny Smith maintaining a two-stage fresh ore crushing circuit, a single-stage oxide ore crushing circuit, a semi-autogenous grinding mill at its on-site processing plant.
Mr Holland said Gold Fields would immediately work to utilise these resources to their potential, while aiming to reduce production costs.
“We plan to immediately consolidate these two operations and rationalise its processing infrastructure and on-site administrative expenses as well as capital,” he said.