(Bloomberg) — A split between the world’s two largest gold producers over the value of their jointly owned Australian mine is more about future economic expectations than what’s in the ground.
That’s the view of Newmont Mining Corp.’s Gary Goldberg, who has been saying for over a year he’d be interested in buying Barrick Gold Corp.’s half of the Kalgoorlie Super Pit — at the right price. Since Barrick officially started a sales process of the 50 percent stake in July, a wide field of potential bidders is said to have formed to vie with Newmont for the stake in Australia’s largest open-pit gold mine.
“We’re not misaligned in terms of where we see some of the value of the resource that’s there,” Newmont’s chief executive officer said in an interview with Bloomberg TV Canada. “But people have different assumptions on exchange rates, and gold price, those sorts of things.”
Gold has been on a wild ride this year. After the largest first-half increase in almost four decades, futures have toppled as speculation increases that the U.S. will raise interest rates, curbing the appeal of the metal as a store of value. The Australian dollar has been similarly choppy, strengthening against the greenback in the first and third quarters and weakening in the second quarter.
The surge in gold prices this year comes after three straight annual declines. That prompted gold miners to cut costs, delay projects and sell assets, creating a situation for many large miners in which maintaining future levels of production is more difficult.
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