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Saracen Mineral to acquire stake in Kalgoorlie Consolidated Gold Mines for $750m

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The deal is expected to be concluded in the fourth quarter of 2019

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Image: The deal is expected to be concluded in the fourth quarter of 2019. Photo courtesy of Khusen Rustamov from Pixabay.

Australia-based Saracen Mineral Holdings has agreed to acquire a 50% stake in the Kalgoorlie Consolidated Gold Mines from Barrick Gold for $750m in Western Australia.

Saracen Mineral already holds two gold operations in the Kalgoorlie region.

The deal is expected to be concluded in the fourth quarter of 2019 and is subject to customary closing conditions.

Barrick president and CEO Mark Bristow said: “The sale of our non-operating interest in KCGM represents the first step in our plan to realize in excess of $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.”

Bristow further added that Barrick was confident that Saracen would be an excellent partner at KCGM going forward.

Proceeds from the sale will further strengthen the balance sheet of Barrick Gold

Barrick intends to use the earnings from the sale to strengthen the balance sheet and invest in their future.

For the transaction, Credit Suisse Securities (Canada) is serving as financial advisor to Barrick while Davies Ward Phillips & Vineberg and Herbert Smith Freehills are acting as legal counsel to Barrick.

Recently, GR Engineering Services has entered into a contract with Saracen Mineral Holdings to carry out the engineering design, procurement and construction of the Carosue Dam operations plant expansion project in Western Australia.

The project is located nearly 120km north east of Kalgoorlie and the value of the contract is $24.5m.

The work on the project is expected to begin immediately with the completion of the upgrade expected to take place in the first half of the financial year of 2021.