Struggling Australian gold miners eye outside backers

Mon Aug 5, 2013 6:09am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* Alacer Gold expects to sign a deal soon to sell mines

* Speculation over further Chinese interest in sector

* Risk of distressed asset sales - Ernst & Young report

By James Regan

KALGOORLIE, Australia, Aug 5 (Reuters) - Australia's Alacer Gold Ltd said it expects to seal a deal within a month to sell two gold mines, in a sign that merger activity in the sector may be starting to stir after a slump in bullion prices.

Gold miners in Australia have been hammered by asset writedowns, as they grapple with high costs and a financing drought that has left many smaller operators scrambling for cash, prompting speculation of an asset swoop by Chinese buyers.

"Certainly some (potential buyers) are Asian-backed operators that already have an Australasian base," Alacer Chief Executive David Quinlivan said, declining to name the interested parties when asked about how the sale was progressing.

Alacer is selling its Higginsville and South Kalgoorlie mines, which together produced 176,000 ounces in 2012/13, in order to focus on lower-cost mines it is developing in Turkey.

"We are expecting indicative bids soon," added Quinlivan, speaking on the sidelines of the Diggers and Dealers conference.   Continued...