Burmine ups pressure in tussle for Yilgarn

THE battle for control of the rich Yilgarn Star gold operations in Western Australia has taken another twist, with Burmine Ltd building a blocking stake in the target company Gasgoyne Gold Mines NL. Gasgoyne, equal partner in Yilgarn Star with Orion Resources NL, is under attack from Sons of Gwalia Ltd and from the US-based Coeur d’Alene in bids valuing the company around $135 million. On-market buying on Tuesday saw Burmine, which proposes to merge with Sons of Gwalia, emerge with a total of 18.1 per cent of Gasgoyne, a stake that managing director Guido Staltari said yesterday reflected the seriousness of the company’s suit. “We wouldn’t just be doing this with any old mining company around the country,” he said. “We’re quite focused on the regional picture. Our motivation is not sourced out of mischief, but we’re quite happy to compete.” Coeur has launched a cash-and-scrip bid for Gasgoyne, and has taken an option to buy the Crabb family’s 19.9 per cent holding in the company. Phil Crabb is the managing director and his brother, Rick, a non-executive director. Burmine also holds a strategic 10 per cent of Orion, with Coeur having recently topped up its own Orion stake to 19 per cent through buying out the holding previously held by fellow US miner Homestake. Mr Staltari said Burmine was waiting to see Coeur exercise the option over the Crabb stake, but was not taking the opposition lightly. “Coeur d’Alene is a progressive company and we’re not out to be arch-enemies,” he said. “We treat them with respect, but we think we have something better (for Gasgoyne shareholders).” Should the Sons of Gwalia-Burmine proposal be successful, the combined entities would control a major swathe of land in the highly prospective Yilgarn belt, stretching from Burmine’s Copperhead operation north of Southern Cross, through Sons of Gwalia’s Marvel Loch mines to Yilgarn Star. Burmine’s interim results, released yesterday, showed a 79 per cent increase in interim net profit to $4.2 million. The result was buoyed by a $3.6 million abnormal gain from the sale of Burmine’s holding in Centennial Coal Co Ltd and the closing-out of hedging positions.