AU - GOLD
Barrick focused on internal growth after shedding gold assets
Barrick Mining Corp. is focused on expanding gold and copper projects after shedding some legacy assets, as deal-making heats up in the global mining industry.
“We’re in a growth phase,” chief executive officer Mark Bristow said on the sidelines of the Mining Forum Americas in Colorado Springs, Colorado.
Barrick sold its last Canadian gold mine last week and, in April, sold a stake in an Alaskan gold project. The company, which changed its name from Barrick Gold this year, has also sought buyers for its Tongon gold mine in the Ivory Coast as Bristow prioritizes copper production. While Barrick said the company is open to taking positions in junior companies, he’s not planning any major deals.
This month’s tie-up between Teck Resources and Anglo American Plc is fueling expectations of more mergers and acquisitions across the mining industry. Now, amid an unprecedented rally in gold prices that’s attracted new capital, some small and mid-tier producers will be forced to consolidate, said Bristow.
(By Yvonne Yue Li)
Indonesia’s United Tractors seeks expansion with gold miner acquisition
Indonesian heavy machinery distributor PT United Tractors seeks to expand its businesses by acquiring a gold miner, according to a filing. Its shares rose.
The company to purchase 100% stake in PT Arafura Surya Alam through conditional sale and purchase agreements signed on Sep. 12 by its subsidiaries with PT J Resources Nusantara and Jimmy Budiarto.
J Resources Nusantara is a unit of PT J Resources Asia Pasifik, while Budiarto is listed as the ultimate beneficiary of the two firms, according to information on the latter’s website.
Shares of United Tractors rose as much as 2.3% on Monday, reversing a decline in the previous session. J Resources Asia Pasifik extended gain to surge 7.8%.
The transaction also involved the purchase of 0.2% stake in entity PT Mulia Bumi Persada from Budiarto. The total enterprise value is listed as $540 million, the filing said.
United Tractors, part of Indonesian conglomerate PT Astra International, specializes in heavy equipment and distributes machineries under the Kubota and Komatsu brands. Its operations also include electric power generation as well as coal and gold mining.
It expects to finalize the transaction no later than Dec. 23, the filing said.
If United Tractors successfully consolidates production from the new gold mine, it could enhance its overall profitability by approximately 10%, with the group’s gold output rising close to around 300,000 ounces, Fauzan Djamal, an analyst at RHB Sekuritas Indonesia, wrote in a note on Monday.
“This contribution is expected to be fully reflected in financials starting in 2027,” he said. The company’s valuation remains attractive, trading at around 5.5 times of price-to-earnings ratio, below its five-year average of around 7 times, he added.
(By Prima Wirayani)
Agnico focuses on internal growth even as mining deals heat up
The merger between Anglo America Plc and Teck Resources Ltd may have set the scene for more major deals, but Agnico Eagle Mines Ltd. is focusing on growing from within.
“We’ve never had a better internal profile. We’re focused on that,” said chief executive officer Ammar Al-Joundi on the sidelines of Mining Forum Americas in Colorado Springs.
While the industry will see more consolidation following the Anglo-Teck deal, according to Al-Joundi, “what we don’t want to see is irresponsible M&A just because the gold price is high. That’s not good for anybody.”
Miners including gold producers have stayed financially disciplined for the past decade after aggressive deal-making at the peak of the China-led commodity super-cycle led to billions of dollars in write-downs and infuriated investors.
Gold mergers and acquisitions could generate a better internal rate of return for miners if the metal holds at $3,000 an ounce, according to Bloomberg Intelligence. BI’s gold mine investment model showed higher scope from buying a mine at average acquisition metrics compared with building an equivalent one from scratch.
Bullion prices have repeatedly hit record highs this year, with the spot price in London reaching a fresh peak of $3,685.64 an ounce on Monday.
“Just with organic growth, we are going to add tremendous value per share,” said Al-Joundi. When the company does decide to do mergers and acquisitions, they are “with a focus on per share value increase rather than just getting bigger,” he added.
(By Yvonne Yue Li)
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