Austral Gold Acquires 51 Percent Stake in Chilean Mining Service
Austral Gold, a growing precious metals mining and exploration company, has acquired the controlling stake in Humberto Reyes Arriendo de Maquinarias, an underground mining contract. Humberto Reyes owns mining equipment and associated vehicles with a company value of around $4 million.
The acquisition – done through Austral Gold’s subsidy Guanaco – cost Austral Gold around $2.7 million; $450,000 was paid up front, the remaining balance will be paid in monthly installments over time.
Humberto Reyes has been working on underground contract mining at the site since 2011. There are several benefits for Austral Gold in this acquisition, including important annualised savings for Guanaco.
With many mining companies looking for footing in the South American mining landscape, Chile is a great foot in the door. Some believe that Latin America and Australia are natural partners for innovation in the industry.
A spokesperson for Austral Gold has said that the acquisition “is a strategic investment for [Austral], since it provides flexibility to accelerate mining of the Guanaco mine resource; allows greater control over safety and production practice at the mine; ensures competitive costs for underground development; and gives management greater overall control over the mine’s operations.”
Austral Gold director Stabro Kasaneva further went on to say that “[t]his transaction is a pleasing development for Austral Gold and represents key strategic investment in the further development of our flagship Guanaco project.”
Austral Gold now owns 51 percent in the company. With the current deal also comes the option to acquire the remaining 49 percent of company in two and a half years. A price would be agreed upon at a later date.
Barrick profit beats expectations as copper, gold prices up
Barrick Gold has reported a 78% jump in first-quarter profit, beating analyst expectations thanks to rising gold and copper prices, and said it was on track to meet annual forecasts.
Production in the second half is expected to be higher than the first, the gold miner said, thanks in part to the ramp-up of underground mining at the Bulyanhulu mine in Tanzania and higher expected grades at Lumwana in Zambia, reports Reuters
Barrick’s first-quarter gold production fell to 1.10 million from 1.25 million ounces due partly to lower grades at its Pueblo Viejo mine in Dominican Republic.
Adjusted profit surged 78% to $507mn in the quarter ended March 31, from $285mn a year earlier, and Barrick announced a 9 cent per share quarterly dividend.
Stronger prices helped boost Barrick’s revenue from its copper mines in Chile, Saudi Arabia and Zambia by 31% from the fourth quarter. Overall earnings per share were $0.29, ahead of analysts’ estimate of $0.27.
“We expect a positive stock reaction to the earnings beat and strong cash flow,” said Credit Suisse analysts.
Potential for South Africa merger
Barrick CEO Mark Bristow, who has championed mergers across the gold industry, said he backed the idea of South Africa-listed miners Goldfields and AngloGold Ashanti combining.
Speculation has been swirling around the two companies and Sibanye-Stillwater, whose CEO Neal Froneman floated the idea of a three-way merger.
“I’m a South African, and this country has such a great mining history and it would be great to see a real gold business come out of the many failed discussions that we’ve seen,” said Bristow.
Goldfields declined to comment. In a statement, AngloGold Ashanti said it was focused on delivering on its growth plan to unlock value from its portfolio of gold assets.
Bristow also said he had met with the Democratic Republic of Congo’s new mines minister and other officials and was continuing to work on getting $900mn belonging to its Kibali mine joint venture out of the country.
“We have a solution, it just needs to be sanctioned by the appropriate authorities which haven’t been around for a while,” he said, referring to a recent government overhaul by President Felix Tshisekedi.