Canadian gold miner Barrick Gold has sold three of its Western Australian gold mines to South Africa’s Gold Fields for $US300 million ($330 million).
The deal means Australia will become the largest production hub for Gold Fields, comprising of 42 per cent of total production, The Australian reported.
Ghana makes up 34 per cent while Peru is at 13 per cent and South Africa is at 11 per cent.
Rumours emerged in April Barrick Gold would sell its Yilgarn South assets, which includes Darlot, Granny Smith and Lawlers mines.
The move came in a bid to decrease production costs as gold prices plummeted.
“The agreement to divest Yilgarn South demonstrates further progress as we work to optimise the company’s portfolio and maximise free cash flow in line with our disciplined approach to capital allocation,” Barrick’s CEO Jamie Sokalsky said in a statement.
“I’d like to extend my gratitude and appreciation to our Yilgarn South employees, who have made a significant contribution to Barrick over many years.”
The three WA mines had all-in sustaining costs of $US1137 an ounce, which was just below the worldwide average.
There were rumours last month Barrick was close to selling its WA assets to Tribune Resources, which was contemplating buying out the East Kundana gold mine.
The Yilgarn South assets give Gold Fields extra WA yearly gold output of 452,000 ounces, 2.6 million ounces of reserves, and a further 1.9 million ounces in the resources section.
The company already owns the St Ives and Agnew mines in WA.
According to Gold Fields CEO Nick Holland, the acquisition was “attractive, opportunistic, and conservatively financed”.
“We see a clear path to value and, once fully integrated, these assets are expected to have a positive impact on Gold Fields’ production, free cash flow and global credit rating,” he said.
The company had an upper hand over other prospective buyers as it can combine its Lawlers and nearby Agnew ventures.
“We plan to immediately consolidate these two operations and rationalise its processing infrastructure and on-site administrative expenses as well as capital,” Holland said.