Barrick-Newmont tie-up could create new top flight Australia gold producer

Wed Apr 23, 2014 4:12am EDT
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* Newcrest could face top-tier local rival if Barrick, Newmont unite

* Speculation merged company will spin off Asia-Pacific assets

* Newcrest March qtr gold output drops 11 pct vs previous qtr

By James Regan

SYDNEY, April 23 (Reuters) - Australia could spawn a new mega gold producer if Barrick Gold Corp and Newmont Mining Corp spin off their Asia-Pacific assets, heating up competition with the country's underperforming market leader Newcrest Mining Ltd.

Barrick and Newmont have been holding friendly merger talks, but remain at odds over how to group mines each company owns in Australia, New Zealand and possibly Papua New Guinea and Indonesia into a separate company, sources close to the talks have said.

If the two companies' Asia-Pacific mines were grouped together, annual output could exceed 2.3 million ounces, challenging Newcrest as Australia's biggest gold producer and the world's fifth largest.

The new entity could also potentially gain a higher rating among investors than it would receive within a combined Barrick-Newmont.

"There's huge investor appetite for an alternative to Newcrest," said Eagle Mining Research gold analyst Keith Goode.   Continued...