Australian gold miner Saracen Mineral Holdings has struck an AU$1.1 billion deal for a 50 per cent stake in Kalgoorlie-Boulder's famous Super Pit operation.

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The Super Pit in Kalgoorlie-Boulder, Western Australia

Saracen Mineral Holdings will acquire Barrick Gold’s 50 per cent stake in the Super Pit, in a deal finalised in Toronto two months after Saracen privately entered a ‘competitive’ sale process and was announced to the Australian Securities Exchange on Monday morning.

The American mining giant Newmont Goldcorp will retain its 50 per cent ownership of the Super Pit operations.

The Super Pit has ranked among Australia's biggest gold mines since 1989, producing more than 21 million ounces.

The Super Pit is a large, high quality, long-life open-pit and underground gold mine located in the globally renowned Golden Mile Region of Kalgoorlie-Boulder, Western Australia. The Golden Mile has produced in excess of 60Moz of gold.

The Super Pit is a large-scale operation with 490koz of gold produced in FY20192 (100 per cent basis), making it one of the largest gold mines in Australia.

Saracen intends to raise approximately AU$796 million via an underwritten institutional placement and an underwritten 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 AU$450 million senior secured term loan.

Saracen estimates it will take more than three years to recover from devastating rock falls but insists the acquisition will pay off in the long run.

Saracen Managing Director, Raleigh Finlayson, said the acquisition was consistent with Saracen’s strategic objectives.

“We are proud to announce this acquisition, which we believe will be transformational for Saracen and our shareholders,” said Mr Finlayson.

“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.”

Mr Finlayson also acknowledged that the Company was very 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.

“This transaction will enhance our business across a variety of key financial and operational metrics and provide our shareholders with exposure to a third high quality Western Australian gold asset.

“The transaction establishes Saracen as a leading gold miner with anticipated production in excess of 600koz per annum exclusively from the Goldfields region of Western Australia for many years to come.”

Mark Bristow, Barrick President and Chief Executive Officer, said that the sale of the non-operating interest in KCGM represented the first step in Barrick’s plan to realise in excess of AU$1.5 billion from the disposal of non-core assets by the end of next year.

“While this iconic gold mine has been a valuable contributor to Barrick over the years, the asset does not fit with our strategy of operating mines that we own. The sale allows us to further focus our portfolio on core operations,” explained Mr Bristow.

Mr Bristow said Barrick was pleased to have achieved a successful outcome following a competitive sale process and was confident that Saracen would be an excellent partner at KCGM going forward. Proceeds from the sale will be used to further strengthen the Company’s balance sheet.

Completion of the Transaction is subject only to approval by the WA Minister for Finance, Aboriginal Affairs and Lands.

Source:  www.saracen.com.au  

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