Mega merger brings gold medal home

Emerging goldminers aren’t the only big news coming out of Western Australia’s gold sector this year.

Home to some of the world’s largest mines, and accounting for more than a third of Australia’s total output, it seems something of an anomaly that the operations delivering WA’s most significant gold output have, for some years, been run by offshore interests.

Until this year, that is.

Between 2013 and 2019, US-owned Newmont Corporation dominated the state’s output before being dethroned by South Africa’s Gold Fields in 2020.

That was helped by the commissioning of the Gruyere joint venture with West Perth-based Gold Road Resources in December 2019, bumping up Gold Fields’ combined output from four mines within the namesake region to 973,000 ounces.

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It’s a different story in 2021, however, with Subiaco-based Northern Star Resources now heading WA’s long list of goldminers.

The company, which recently farewelled five-year chairman Bill Beament, produced almost 1.4 million ounces in the year to March 31, making it the first local business to be ranked the state’s most significant goldminer in at least two decades.

That meant jumping two spots from 2020, according to Business News’ list of WA goldminers.

The list ranks producers based on their annual output, followed by the number of staff in WA.

Northern Star’s rise to the top was helped by a mega merger with Saracen Mineral Holdings earlier this year, through which it gained the Raleigh Finlayson-led company’s 50 per cent share of the Kalgoorlie Super Pit, enabling it to take full control of the asset, along with the Thunderbox and Carosue Dam mines in WA.

Last week, Stuart Tonkin was appointed managing director of the merged group, as the company announced Mr Finlayson would transition to a non-executive role.

Wesfarmers chair Michael Chaney was appointed as non-executive chair following Mr Beament’s exit from Northern Star at the start of July to join local copper company Venturex Resources.

Venturex is trading at six times more than what it was in early February, around the time Mr Beament announced his decision to join the company as an executive director.

That’s not a surprise, given he brought Northern Star to its multi-billion-dollar merger with Saracen that month.

The deal was announced in October 2020, less than a year after Northern Star and Saracen each purchased an equal stake in the Kalgoorlie Super Pit from its former North American owners.

The asset is operated by Northern Star’s (now) wholly owned subsidiary, Kalgoorlie Consolidated Gold Mines.

It produced 447,300 oz in the 12 months to March 31, in line with KCGM’s full-year forecast.

Output is expected to reach 500,000oz in FY24, followed by a steady climb to 675,000 oz from FY28.

That’s supported by a resource update, announced in August last year, which outlined an additional 15-year mine life.

Former joint owner Newmont Corporation has dropped one spot on the Business News ranking, to third place, after producing 680,000 oz from its Boddington mine in the year to March 31.

Boddington, which officially reopened in 2010, is the biggest goldmine in WA.

Newmont’s other Australian asset is the Tanami operation, located in the Northern Territory.

Canada’s Barrick Gold has shed its entire portfolio of WA assets in the space of seven years, with the sale of its share in the Super Pit its last deal.

That included the sale of the Darlot, Granny Smith, and Lawlers (Agnew) mines to Johannesburg-based Gold Fields in 2013.

Today, the Darlot mine, located 58 kilometres east of Leinster, is owned by West Perth-based Red 5 and accounts for all of the company’s annual production. 

That totalled 81,600 oz in the year to March 31, placing Red 5 at 19th on Business News’ list. 

In May, the company lowered its forecast for the full 2021 year after revealing smaller-than-expected output at Darlot during the March quarter, primarily due to labour shortages.

In more positive news for the company, Red 5 says it is fully funded to bring its nearby King of the Hills project to production, with first gold pour expected in the June quarter of 2022. 

The operation has a mine life of 16 years and should add around 150,000 oz to Red 5’s combined annual output.

Meanwhile, Gold Fields produced slightly more than 1 million ounces from its four mines in the year to March 31, including the St Ives operation and a 50 per cent share in Gruyere, ranking the company as WA’s second biggest goldminer.

Gold Fields, although overtaken by Northern Star, has sat comfortably among the state’s top three producers since it acquired Barrick’s assets.

Its JV partner, Gold Road, has jumped four spots on Business News’ list to rank WA’s 12th biggest goldminer, solely because of its Gruyere stake. 

The mine produced 264,800 oz in the year to March 31, split evenly between the two operators.

One joint venture to have made recent headlines is the Tropicana operation, north-east of Kalgoorlie. 

In May, nickel miner IGO sold its 30 per cent interest in the mine to Subiaco-based Regis Resources for $889 million in cash. 

IGO said the sale would allow the company to focus on commodities critical to clean energy, with its flagship operation being the Nova nickel-copper-cobalt mine in the Fraser Range.

The company is ranked the state’s 14th biggest goldminer, with its former share in Tropicana having produced 113,200 oz in the year to March 31.

But with no other gold interests – or apparent plans to purchase any – IGO will likely drop off Business News’ list in the current financial year. 

AngloGold Ashanti, which owns the remaining 70 per cent of Tropicana, produced 282,000 oz from its share in the asset in the year to March 31, along with 245,000 oz from its Sunrise Dam operation near Laverton, for a total of 527,000 oz. 

Much like its South African counterpart (Gold Fields), AngloGold has consistently ranked among WA’s biggest goldminers, and remains fourth on the Business News list. 

To the north, Newcrest Mining’s Telfer operation produced 404,300 oz in the year to March 31, bumping the Victorian company to fifth place. 

Regis Resources followed, with a combined 346,000 oz from its Duketon projects – Moolart Well, Garden Well, and Rosemont mines – climbing one spot. 

Its position is expected to improve even further when production at Tropicana is included.

Regis recently revealed an increase in the mine’s mineral resources and ore reserves, to 10.4 million ounces and 4.8 million ounces, respectively, with further investment in regional exploration to continue, managing director Jim Beyer has said. 

East Perth-based Ramelius Resources is ranked seventh on Business News’ list, rising from 10th spot last year.

The company, led by Mark Zeptner, produced 300,200 oz from its Mt Magnet and Edna May operations in the year to March 31.

Meanwhile, Silver Lake Resources, Westgold Resources, and Norton Gold Fields claimed eighth, ninth, and 10th biggest goldminer in WA.

Evolution Mining sits in 13th place, with output from its Mungari mine totaling 130,000 oz.

Its position is expected to improve next year, with the company having recently purchased some of Northern Star’s Kalgoorlie operations for $400 million.