Deep in the heart of Australia’s dusty outback, the world’s biggest gold mining companies are locked in a standoff.
At the center of the impasse is a 50 percent stake in the country’s largest open-pit gold mine, known as the Kalgoorlie super pit. Barrick Gold Corp., the No. 1 bullion producer, wants to sell its 50 percent holding of the pit. Newmont Mining Corp., which stands at No. 2 and already owns half the mine — and operates it — wants to buy. That’s where the simplicity ends.
Toronto-based Barrick has opened up a bidding process for its half of the mine, and President Kelvin Dushnisky expects the auction to be competitive. Initial indications are very positive,” Dushnisky said Monday in an interview from Colorado Springs during the Denver Gold Forum. “We think it’s going to be a strong process.”
Newmont Chief Executive Officer Gary Goldberg said the company will participate in Barrick’s sale process, but is only going to buy at the right price. “We welcome their process as they go through, and we’d like to participate in it to see where it lands,” Goldberg said Monday during a separate interview also from the Denver Gold Forum. “But we would want to acquire it for good value.”
The showdown is a sign of the times in the gold world. This year’s 24 percent surge for bullion prices has been a welcome surprise for many producers, but it comes after three straight years of annual declines. Investors, wary of a return to the bear market, are demanding that companies maximize value in all potential deals.
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