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News.com.au
5 days ago
- Business
- News.com.au
Diggers and Dealers: Hannan Street bids farewell and so does Gold Road
Duncan Gibbs gives tearful farewell as Gold Road boss warns of exploration decline Benz and Waratah turn heads, Gorilla marketing and Pantoro's bull Who won the Diggers and Dealers Awards? Gold Road Resources (ASX:GOR) managing director Duncan Gibbs has delivered a parting swipe at roadblocks halting major mining discoveries in WA as he bid an emotional farewell to the company's historic journey ahead of its $3.7bn takeover by Gold Fields. A 3c stock before the discovery of the now 300,000ozpa+ Gruyere gold mine in WA, the company surged more than 100 times over as it built the 50-50 JV in WA's previously uncharted Yamarna Belt and caught the tailwinds of the recent gold boom. Run on the smell of an oily rag, Gold Road once sold cows from the Yamarna pastoral station to fund drilling at the discovery, 200km east of Laverton, made at a time when gold prices had crashed to ~$1400/oz and with sentiment in the gold sector close to an all-time low. Twelve years on and gold is now paying more than $5000/oz, driving historically strong cash flows across the industry. But a tearful Gibbs, who played a role in two of the other major WA gold discoveries of the past 30 years as the head of AngloGold's exploration division at Sunrise Dam and Tropicana, warned red tape was hurting the industry's ability to find another mine like Gold Road and Gold Fields' big slice of outback cheese. "Exploration is getting harder," he said late on the final day of Kalgoorlie's Diggers and Dealers conference. "Part of it is the maturity of exploration, the stuff that's sticking out the surface (has been found). "We then had a whole sequence of discoveries that were really made by just blitzing and finding surface sampling, soils or what have you and they found a whole wave of discoveries. We're now looking in belts like Tropicana, which were regarded as the wrong geology – I kind of put Hemi in that wave. " Or they're under cover like Havieron. "The other thing that is massively more complicated is the whole heritage, native title access, environmental stuff. And unless, I think, there's some creative, innovative solutions to changing that current model, the industry is in a downward decline. "And to the detriment of the industry and remote communities – and that includes Aboriginal people." Gibbs, who also claims former mentees among the exploration teams that found the world-class Hemi and Havieron discoveries, said the Gold Road story provided hope for struggling juniors in the marquee at the time-honoured Kalgoorlie gabfest. But he also said exploration and administration costs, land access issues, and the approach to capitalising the junior exploration sector needed to change. "I think capital markets have become quite short-n term thinking. "The biggest fundamental value that you can create in the industry is finding another (mine). "If you look at it from a wealth creation and Australian economy point of view, we've got to do something about the state of exploration. It's not as simple as just throwing more money at it. We actually need to sort out some of the land access issues that we've now created, particularly in Western Australia." Talk of the town A couple of juniors did emerge as bolters at the conference, with numerous punters who spoke to Stockhead looking closely at NSW copper and gold explorer Waratah Minerals (ASX:WTM) and WA gold explorer Benz Mining Corp (ASX:BNZ). Waratah surged 21.7% on no news on the final day of the event, having stunned the market with an intercept of 208.7m at 1.17g/t Au from 514m at the Spur Gold Corridor on Monday. Drilling returned multiple zones of visible gold at the Consols prospect, boosting Waratah's strike at Spur to over 1.5km near Newmont's world class Cadia gold and copper mine. MD Peter Duerden secured a fill-in speaking slot on Monday and it was very well-timed, with the stock now up 96% over the past week. "You can start to get a sense of the continuity of mineralisation here," Duerden said. "It's a real pivotal hole for us and for the gold endowment of the Spur Gold Corridor." Benz Mining's CEO Mark Lynch-Staunton drew comparisons for its Glenburgh gold project – acquired from the tent of Spartan Resources (ASX:SPR) as its head was turned to its amazing Never Never discovery at Dalgaranga – to the 500,000ozpa Tropicana gold mine. "If I'm going to make a prediction in 12 months' time this is not going to look like this, it's going to look very different," he said late on Wednesday. "If you missed out on Hemi and you missed out on Gruyere, I truly believe this will be the next multi-million ounce gold district." Fighting words indeed. Benz shares have run 14.3% higher in the past week. Gorilla marketing Also running hot has been Gorilla Gold Mines (ASX:GG8), the owner of the Comet Vale and Vivien projects in the Goldfields. Up 18%, GG8 fed its investors a fattening diet of promotional activities throughout Diggers and Dealers, including a site visit and investor breakfast. But it was the company's, quite literal, gorilla marketing that really turned heads. Spartan's 'chariots' (really rickshaws) were still doing the rounds despite its $2bn plus takeover by the more reserved Ramelius Resources (ASX:RMS). Stablemate Gorilla, which includes Spartan's Simon Lawson on its board, also went literal with a lady in a gorilla suit the hottest model on the Diggers catwalk. We have it on good authority the actor's pay packet included a $30/hr rate with two cartons of bushchooks thrown in as performance rights (Emu Export, the driller's drink of choice, for you blank-faced othersiders). Naming conventions at the explorer's growing prospect list are also getting enterprising. Harambe is reportedly one of them. Taking inspiration from Planet of the Apes, we've suggested Caesar has real potential as a target. And we look forward to riding down a future decline named after fictional Korean baseball prodigy Mr Go. Charles Hughes turned heads by presenting on Tuesday in hi-vis, having just bolted down from site. No match for $1.6bn gold miner Pantoro (ASX:PNR), whose boss Paul Cmrlec gave investors a tour down memory lane with previous Diggers slides from the Norseman gold mine owner dating back to its acquisition of the Halls Creek project in 2014 as a $15m explorer. It included a CGI render of a bull sh**ting gold bars. The space between those two words is an important distinction, investors in Pantoro will hope, after the long-struggling miner stashed away $43.3m of cash and gold in the June quarter. And the wiener is... All eyes turned to the Diggers and Dealers gala dinner on Wednesday night, which featured the forum's all important awards. Digger of the Year was claimed for a momentous second time by Ramelius Resources (ASX:RMS) after its previous success in 2020. The Mt Magnet miner, which recently closed its acquisition of neighbour Spartan, pulled in an incredible $694.9m of free cash on a record 301,664oz of gold production in FY25. It's the first two time winner of the prize. Dealer of the Year went to De Grey Mining after the Hemi gold mine discovery culminated in its ~$6bn takeover by Australia's largest gold miner Northern Star Resources (ASX:NST). It breaks a curse for Best Emerging Company award winners, previously known as a poison chalice. This year's winner of that prize came from left field, with Cote d'Ivoire explorer Turaco Gold (ASX:TCG) claiming BEC honours for its Afema gold project. Justin Tremain's $520m firm picked up Afema in early 2024. As of May it had 3.55Moz in gold resources, with the junior sitting on a 725% five year gain and $520m market cap on Wednesday. Westgold Resources and Metals X founder Peter Cook, whose cover band held court at Kalgoorlie's Gold Bar for two straight nights, won the GJ Stokes Award for lifetime achievement in the mining industry, reflecting over 30 years as a leading executive in the WA mining industry. He follows his old chairman Peter 'Talky' Newton, the 2005 winner of the award, into the Diggers equivalent of the hall of fame. The media award went to Paydirt's Michael Washbourne while Mason Calter won the Ray Finlayson Award, which goes to a high performing student at the local Kalgoorlie campus of the WA School of Mines.
News.com.au
6 days ago
- Business
- News.com.au
Diggers and Dealers: Is gold M&A done or is it just heating up?
Gold miners are the toast of the town at Kalgoorlie's Diggers and Dealers, but intrigue abounds on the next M&A deal Big producers are cashed up, but wary bad M&A could ruin the gold boom Junior developers could be more attractive to mid-tiers, but now have the institutional backing to go it alone Money has flowed freely for gold producers in the past two years underpinning a long overdue period of consolidation in the Australian gold space. De Grey Mining took a scrip deal for Northern Star Resources (ASX:NST) to develop its Hemi mine. Gold Road Resources (ASX:GOR) looks to be on the way out with a logical $3.7bn acquisition by its 50-50 JV partner in the Gruyere mine, Gold Fields. Andrew Forrest-backed Greatland Resources (ASX:GGP) has emerged as the owner of the Telfer gold mine after a US$475m purchase from Newmont Corporation (ASX:NEM). Westgold Resources (ASX:WGX) swallowed Karora Resources, owner of the Beta Hunt gold mine. And Ramelius Resources (ASX:RMS) last week formally converted its stake in Spartan Resources into a merger to grab control of the Dalgaranga gold mine and Never Never gold discovery. The low hanging fruit, the obvious stuff, appears to be gone – sans an often discussed merger between Leonora region competitors Vault Minerals (ASX:VAU) and Raleigh Finlayson's Genesis Minerals (ASX:GMD), which if investment bankers had their way would reunite the old Sons of Gwalia assets under a single roof (one owned by SOG founders the Lalor brothers' nephew Raleigh Finlayson). So, has consolidation run its course, or is the record cash generation stirred by a rising gold price simply creating a fertile environment for more to come? We checked the temperature of a host of miners across the junior and senior end of the gold market at the Diggers and Dealers conference in Kalgoorlie yesterday. Brothers in arms After last year being cheekily placed one after another, Ramelius' Mark Zeptner and Spartan's Simon Lawson, now the deputy chair of the Mt Magnet gold miner, presented together. Talking to media together, Zeptner said the combination of Dalgaranga and Mt Magnet, slated to make the company a 500,000ozpa miner by 2030, will be the company's main focus now, even with a $784 million warchest to pursue further deals. But he doesn't think miners will be put off by the high gold price if they want to deal. "There is a school of thought that you shouldn't do deals at the top of the gold price. I probably believe you do them when you can and as long as you're applying reasonable gold prices in your assumptions, you do them when you can," he said. "Otherwise, you might be waiting a long time for a gold price low. Like I said that before, so who knows whether there's ever been a bit of a wave and we have a bit of a lull? Not sure." Lawson said the momentum was there for gold M&A to continue. A company run by a former colleague of Lawson's – Darren Stralow's Bellevue Gold (ASX:BGL) – is known to be a potential target though a recent downgrade has reset expectations, the former Spartan boss and Northern Star geo noted. He suggested the enlarged scale of Ramelius could, for the first time, make it a more attractive acquisition target for a larger fish. "I'm not going to put words in Mark's mouth, but I think Ramelius is just going to be sitting, watching what's going on and focusing on its knitting," he said. "I still think that there's a fair bit of interest. I think maybe the combination has actually made Ramelius combined a bit of a target for bigger players." Careful what you wish for Other miners think M&A continues, with cash balances across ASX gold miners nudging $8bn and around $1.6bn added to coffers in the June quarter with prices now around US$3350/oz. Northern Star MD Stuart Tonkin thinks a pullback in gold equities, down around 20% in the past month and a half before a 3.6% bump on Monday, could be catalyst to motivate more M&A. Evolution Mining (ASX:EVN) MD Lawrie Conway, however, warned miners around being too optimistic, saying the gold price would retrace at some point. "If we get through this cycle and the cash isn't there, then you have a real risk that we lose shareholders," he said. "Our job and we continue to make sure that we have our projects well sequenced and timed, if companies can do that, if companies don't rush out and and just buy assets for the sake of growth, then that will be a really good outcome, because at some point the gold price is going to come down. "I think it's fair to say what we've said for the last 12 months – that there's a time to do deals and there's a time to make money. And right now, it's time to make money. "Our view is that there will be an asset that's for us and a good fit for us at the right time. Right now there's nothing that we're seeing in the market that fits with us." Junior junctures While the big end of town has been the focus for M&A as large producers and mid-tiers seek growth and mine lives, there are calls for more consolidation at the junior end. Even with high prices, BDO Head of Global Natural Resources Sherif Andrawes says more M&A will happen, especially with scrip becoming the chosen form of tender. "What that means is the ratio stays the same pretty much even, though both sides are high. So that works out quite nicely," he said. "What we're going to see going forward I think, is some more of that but also more of the smaller players coming through and more deals in the scrip space rather than in the cash space." " I think we'll certainly see some more mergers at the bottom end of the market and potentially for the right ones, we might see some cash deals from the bigger companies who've got lots of cash." One junior which has built its identity on M&A is Brightstar Resources (ASX:BTR), with a string of deals turning the one time penny stock into a $250m developer. It is planning to produce around 35-40,000ozpa from a tolling operation in WA's Goldfields, the result of a string of deals, with a broader 70,000ozpa+ operation to be established in a couple years once it has refurbished a processing plant near the town of Laverton. But a larger ambition exists to become a 200,000ozpa miner by the end of the decade through the development of a larger hub around the Mid West WA town of Sandstone, where the final piece of the puzzle is likely to come via a scheme deal to acquire Aurumin (ASX:AUN), taking BTR's resource base there beyond 2Moz. MD Alex Rovira thinks majors and mid-tiers will increasingly look at junior deposit owners to fuel growth – a $189m scrip bid by Capricorn Metals (ASX:CMM) for Warriedar Resources (ASX:WA8) is one example. It will also be key for companies like Brightstar to build scale and join that mid-tier class. "We've obviously been pretty strong advocates for M&A for the last two years, and we've done a number of schemes and takeovers," he said. "I think for us the journey the over the last two years has been let's get scale, let's get some projects that are naturally synergistic with each other into the same portfolio. "Let's get that critical mass so we've actually got something that can support a 200,000 ounce per annum producer." "If Brightstar was to get acquired by a mid-tier or a major, it's going to be for the growth profile that we can show." Not the endgame But becoming a pawn in an M&A endgame is not a given for junior developers, many of whom are sitting on big gains this year. With gold prices surging, juniors like Astral Resources (ASX:AAR), which owns the 1.8Moz Mandilla and Feysville projects near Kalgoorlie, are no longer easy prey. Astral was previously thought of as a logical play for Gold Fields, which owns an underfed mill at the nearby St Ives gold mine. But now, the $213m company has its own clout, boasting a share register with a rising number of institutions. That gives it the capacity to raise quick capital, a bulwark against predatory M&A because its assets have a serious pathway to development. "When you've got 5% institutional holding and you're approaching a DFS stage and a final investment decision, the market looks at you and goes, well, how are you going to raise $100 million of equity when you are primarily funded by mums and dads?" Ducler told Stockhead. "We are a very different company to that today, but similarly across that developer space, when the instos are there and you have the ability to fund your project, you can run it funding the project and building the project. "Then from an M&A perspective, if someone wants to come, they don't have the luxury of time anymore because we will be able to move towards development." Other deals are on the lips of delegates though, after The Australian floated talk of a rebuffed $400m takeover offer for New Murchison Gold (ASX:NMG) from Meeka Metals (ASX:MEK).
Business Insider
05-05-2025
- Business
- Business Insider
South Africa's Gold Fields to acquire Australia's Gold Road for $2.4 billion
South African gold miner Gold Fields, via its subsidiary Gruyere Holdings, has announced plans to acquire Gold Road Resources in an enhanced deal that values the Australian gold miner's equity at A$3.7 billion (US$2.39 billion). Gold Fields plans to acquire Gold Road Resources in a deal worth A$3.7 billion. Acquisition will give Gold Fields full control of Gruyere gold mine in Western Australia. This marks the third major gold sector transaction in the last six months due to soaring gold prices and geopolitical tensions. South African gold miner Gold Fields, via its subsidiary Gruyere Holdings, has announced plans to acquire Gold Road Resources in an enhanced deal that values the Australian gold miner's equity at A$3.7 billion (US$2.39 billion). The buyout, announced Monday by both companies, will give Gold Fields full control of the low-cost, long-life Gruyere gold mine in Western Australia, which it currently operates through a joint venture with Gold Road Resources, Reuters reported. Gold Fields currently holds the other 50% interest in the Gruyere gold mine, and said that the consolidation forms part of its strategy of improving portfolio quality via long-life assets. This marks the third major gold sector transaction in just six months, as soaring geopolitical tensions drive gold prices to record highs and intensify merger activity in one of the world's hottest mining markets. Earlier this year, Northern Star Resources agreed to acquire De Grey Mining in an all-share deal valued at A$5 billion, while Ramelius Resources moved to take over Spartan Resources, creating a combined A$4.2 billion entity. A robust gold price, coupled with a weaker Australian dollar, has made local producers especially appealing to global investors, one investment banker noted. Bellevue Gold, valued at A$1.3 billion, is widely seen as a potential next target after hiring UBS last month to conduct a strategic business review. Under the terms unveiled on Monday, Gold Fields has sweetened its bid for Gold Road Resources, offering shareholders a fixed cash payment of A$2.52 per share along with a variable cash component tied to the full value of each shareholder's stake in Northern Star Resources. The new offer represents a notable increase from the initial March proposal of A$2.27 per share plus the variable component, a deal Gold Road had dismissed as 'highly opportunistic.'
ABC News
05-05-2025
- Business
- ABC News
Gold Fields increases takeover offer for Gold Road Resources to $3.7b
The head of a Perth-based gold miner that is the target of a $3.7-billion takeover bid expects there will be further consolidation in the sector as prices for the precious metal reach record highs. The ASX-listed Gold Road Resources emerged from a trading halt on Monday to announce that its South African joint-venture partner, Gold Fields, had increased its previous bid of $3.3b by 43 per cent. The companies jointly own the Production at the Gruyere gold mine got underway in 2019. ( Supplied: Gold Road Resources ) Gold Road managing director Duncan Gibbs said the original offer was rejected as "opportunistic" because it did not take the potential for a future underground operation into account. "It was a bit out of the blue because Gold Fields hadn't actually approached us prior to that — and it arrived by email, which we found a bit surprising," he said. "That's all history now because there's been a lot of engagement to get to the outcome we've got now. " It's a good deal for Gold Road and the feedback I've had to date has been very positive. " In the absence of a superior proposal, Gold Road's board has recommended shareholders vote in favour of the takeover at a meeting likely to be held in September. The takeover is also subject to approval by the Foreign Investment Review Board, which is likely to be a formality given Gold Fields already operates three other mines in WA. More deals to be done The new offer comes amid renewed interest in the mergers and acquisitions space as the Australian dollar gold price Australia's biggest gold miner, Northern Star Resources, officially took ownership of the rich Hemi discovery in WA's Pilbara region on Monday after completing its WA gold miner Ramelius Resources is also progressing a takeover of Spartan Resources, its neighbour in the state's Midwest, in a deal worth $2.4b. Mr Gibbs said he expected more consolidation to follow. The processing plant at the Gruyere gold mine has had ongoing operational issues since it was commissioned in 2019. ( Supplied: Gold Road Resources ) "Do I think there's probably going to be more of it? Yes," he said. "Everybody is talking to everybody, which is situation normal. "I think there are points in price cycles which drive a bit more consolidation, but these things appear to go in waves. "The reality is companies are looking to grow all the time. "That can be through bolt-on acquisitions or larger mergers, which we have seen." Australia's next big gold mine Meanwhile, as the dust settles on its De Grey takeover, Northern Star Resources is turning its attention towards building Australia's biggest new gold mine at Hemi. Northern Star managing director Stuart Tonkin said the company would update the Hemi project timelines later this year once there was a clearer picture on the regulatory approvals. Northern Star Resources managing director Stuart Tonkin has described the Hemi project as being "low-cost" and "long-life". ( ABC Goldfields: Jarrod Lucas ) A feasibility study released in September 2023 estimated Hemi would cost $1.3b to bring into construction, creating 900 construction jobs and 600 operational roles. Previous owner De Grey Mining expected construction to take two years at the mine, which is 85km from Port Hedland. "The [capex — capital expenditure estimates] will need to be reviewed and dusted off to make sure it's still relevant," Mr Tonkin said. "De Grey had been articulating what the timeline was and we're not indifferent to what that is." Northern Star Resources' Steve McClare and Kalgoorlie Consolidated Gold Mines' Nick Strong oversee construction of the Fimiston Mill. ( ABC Goldfields: Jarrod Lucas ) Mr Tonkin said construction crews at work on a "We take a lot of learnings away from the Kalgoorlie expansion," he said. "The neatness of teams moving from Fimiston into Hemi is very strong." The previous feasibility studies for Hemi estimated an initial 12-year mine life and payback on the $1.3 billion investment in less than two years, based on an Australian dollar gold price of $2,700 an ounce.
Perth Now
05-05-2025
- Business
- Perth Now
Share market winning streak at risk as banks, oil slip
Australian shares are on track to break a seven-session winning streak, after hopes of an early uptick crumbled under downward pointing US futures. The S&P/ASX200 was down 57.9 points, or 0.7 per cent, to 8180.1 by midday, as the broader All Ordinaries lost 54.3 points, or 0.64 per cent, to 8401.9. After-hours trading on Wall Street's S&P500 mini-futures slipped by 0.7 per cent on Monday morning, after the main index failed to break convincingly above pre-Liberation Day levels last week. The leading US index could and could be taking a breather after better-than-expected quarterly earnings and hopes of tariff relief helped it to a nine-day winning streak, it's best run in 20 years. "I think this week's catalysts could see markets become anxious," Moomoo market analyst Jessica Amir said. "It all depends on the results we see from US, UK and other central banks' meetings, earnings reports from about 100 companies and tariff talks." Locally, Labor's landslide federal election win at the weekend quelled investor fears of a minority government, with Prime Minister Anthony Albanese's party set to sweep 86 of Parliament's 150 seats. "Now we can expect the investment world will get back to basics: focusing on fundamentals, the health of the local economy and companies that make up our share market," Ms Amir said. Financial stocks weighed heavily on the local bourse, down 1.6 per cent as Westpac lost 2.5 per cent slip after posing a one per cent drop in half year profit. The Commonwealth Bank was also down 2.2 per cent, rejecting from its $169.75 record on Friday to trade at $165.95. Energy stocks were sharply lower, down 2.1 per cent, tracking with a dip in oil prices after OPEC+ flagged output hikes of up to 2.2 million barrels per day by November. US President Donald Trump, who has urged OPEC+ to boost crude supply to cut prices at the bowser, is set to visit leader-member Saudi Arabia in May to discuss an arms deal. Brent crude futures have lost the $US60 level to trade at $US59.13 a barrel. The slip in fuel prices helped Qantas shares rip 2.7 per cent higher to $9.31, with last month's 18.5 per cent drop in crude prices set to filter through to jet fuel prices. "Qantas always seems to be quick to add a fuel tax/surcharge to flight prices when the crude oil price is ripping higher," IG Markets analyst Tony Sycamore said. "Will Qantas be looking to pass on their fuel cost savings to customers?" Eight of eleven local sectors were trading lower by lunchtime, with industrials bucking the trend with a 0.6 per cent gain. Materials stocks were down 0.5 per cent, with large cap miners Fortescue (-1.4 per cent), Rio Tinto (-0.8 per cent) and BHP (-0.7 per cent) all trading lower. Most gold miners were in the red, with the exception of Gold Road Resources, which had rallied almost 10 per cent to $3.26 after the takeover target entered into a scheme implementation deed with suitor Gold Road Resources. The Australian dollar has continued to make ground against the greenback and is buying 64.68 US cents, up from 64.11 US cents on Friday at 5pm.
