Alacer Gold has put two of its gold mines in Australia up for sale and said it expects to have both of them sold within a matter of months.
The move to sell the mines might be an indication that merger activity in the sector may be starting to stir after a slump in bullion prices. The speculation is that Chinese investors could take over the mines, Reuters reported.
“Certainly some (potential buyers) are Asian-backed operators that already have an Australasian base,” Alacer Chief Executive David Quinlivan said, declining to name the interested parties when asked about how the sale was progressing.
Alacer is selling its Higginsville and South Kalgoorlie mines, which together produced 5.5 t (176,000 oz) in 2012/2013, in order to focus on lower-cost mines it is developing in Turkey.
This year alone, seven Australian gold mining companies including Alacer Gold, OceanaGold and Silver Lake Resources And Evolution Mining have clocked up A$2.5 billion ($2.23 billion) in writedowns this year.
And it is not just Australian companies that have struggled. Barrick Gold, the world’s biggest gold producer unveiled an $8.7 billion writedown and said attempts to sell mines in Australia were “well advanced.”
But there has still been some interest in the sector.
China’s biggest gold producer, Zijin Mining Group , paid $240 million for control of Australia's Norton Gold Ltd. a year ago, while ChinaMolybdenum Co agreed to pay $820 million for Rio Tinto’s majority stake in the Northparkes copper and gold mine.
Norton is in the process of finishing up a friendly scrip takeover of Kalgoorlie Gold Mines.
While other companies are bracing for tough times by laying off workers and closing mines, the company’s chief executive Dianmin Chen said he is planning to nearly double gold production and is keeping an eye out for potential acquisitions to support Zinjin’s growth plans outside China.