Saracen Mineral Holdings Limited (ASX:SAR) has underwritten its future as a leading Australian gold producers by entering a sale agreement with Barrick Gold Corp (NYSE:GOLD) (TSE:ABX) (ETR:ABR) to acquire its 50% stake in the Kalgoorlie Consolidated Gold Mines JV, which operates the Super Pit.
This will occur through the purchase of 100% of the shares in Barrick (Australia Pacific) Pty Limited for a price of US$750 million.
The Super Pit is a large, high-quality, long-life open-pit and underground gold mine in the globally renowned Golden Mile Region of Kalgoorlie-Boulder, Western Australia.
One of Australias largest gold mines
There have been more than 60 million ounces of gold produced from the Golden Mile.
The Super Pit is a large-scale operation with 490,000 ounces produced in FY2019, making it one of Australias largest gold mines.
Newmont Goldcorp Corp (NYSE:NEM) (TSE:NGT) (FRA:NMM), the worlds leading gold company, will be Saracens JV partner and will retain its 50% ownership interest in the KCGM JV and operatorship of the Super Pit.
Institutional placement
Saracen intends to raise approximately A$796 million via an underwritten institutional placement and an underwritten 1 for 5.75 pro-rata accelerated non-renounceable entitlement offer to partly fund the transaction.
The balance of the purchase price will be funded from a new A$450 million senior secured term loan.
Saracens managing director Raleigh Finlayson said the acquisition was consistent with Saracens strategic objectives and would give the company three mines in close proximity to Kalgoorlie.
“Transformational” announcement
“We are proud to announce this acquisition which we believe will be transformational for Saracen and our shareholders.
“The Super Pit is a Tier-1 Australian gold mine with an outstanding track record of stable, large-scale gold production and cash generation over many decades.
“It is an asset Saracen knows well and has admired for many years and we are confident it aligns with our clearly defined growth strategy.
“We are excited to partner with Newmont Goldcorp who has extensive knowledge of the Super Pit and unrivalled experience in open-pit and underground operations.
“We believe there is significant exploration and development potential at the Super Pit and we look forward to working collaboratively with Newmont Goldcorp to ensure it is realised.”
“Enhance our business”
He said, “This transaction will enhance our business across a variety of key finRead More – Source
