Australia Just Ramped Up Super-Pit Fight Between Top Gold Miners – by Danielle Bochove (Bloomberg News – September 25, 2017)

https://www.bloomberg.com/

A tax hike in Western Australia stands to lower the value of a massive gold deposit and further drive apart its owners: the world’s biggest producers of the metal who have spent the last two years debating what the mine is worth.

Newmont Mining Corp., the second-largest gold miner, has been interested in buying Barrick Gold Corp.’s 50 percent stake in the Kalgoorlie Super Pit since at least 2015. Newmont already owns the other half and operates the mine for Barrick, the No. 1 producer of the metal. The only reason a deal hasn’t been done, the two sides say, is price.

Now, the royalty increase could further the gap between how much the companies think the operation is worth. The higher tax “adversely” affects the value of Kalgoorlie, said Gary Goldberg, Newmont’s chief executive officer.

Goldberg’s comments underscore the arguments over price. Rival Barrick has stressed that selling the stake is all about value, and a failure to reach a deal with Newmont has nothing to do with a culture clash.

“If it made sense economically for their shareholders and for ours, there’d be nothing that would prevent us from doing something together, a transaction,” Barrick President Kelvin Dushnisky said of a deal with its rival.

For the rest of this article: https://www.bloomberg.com/news/articles/2017-09-25/australia-just-ramped-up-super-pit-fight-between-top-gold-miners

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