* Evolution chairman sees Australia's gold mine M&As easing
* Focus on exploiting assets post buying spree
By James Regan
SYDNEY, Oct 27 A wave of gold mine acquisitions
in Australia may be coming to an end as valuations rise and
companies focus on exploiting existing assets, Evolution Mining
Ltd Executive Chairman Jake Klein said.
Under Klein, Evolution has helped spearhead billions of
dollars in M&A across the Australian outback in a quest to
elevate its standing on the Australian Securities Exchange to
that of a major producer.
Others doing the same thing included Northern Star Resources
and an Australian arm of China's Zijin Mining Group
So far this year there have been some two-dozen announced
deals in gold mining worth more than $1.7 billion, compared with
about $2.2 billion in 2013 and 2014 combined, according to
Over the last four years, Evolution has developed or bought
seven gold mines, leap-frogging Northern Star to become
Australia's second-biggest gold miner after Newcrest Mining
, with a market capitalisation of A$2.2 billion ($1.59
"We are having our moment in the sun, but you must be
careful not to get sunburnt," Klein told Reuters.
Asking prices for gold mines that may be on the block have
gone up since Evolution made its last big buys, a pair of mines
from Luxembourg-based La Mancha Group International BV which it
bought for A$230 million, and one from Barrick Gold
priced at $550 million.
"Operating assets today are certainly more expensive than
they were a year ago," Klein said. "We're now focused more on
integrating existing assets and getting them to perform
Northern Star is also settling in to a period of working its
assets after a buying spree, saying the strategy will allow it
to lift its annual output to 700,000 ounces and beef up reserves
for future production.
"We recently added 2.7 million ounces to our resource base
at a cost of just A$19 an ounce," Northern Star Managing
Director Bill Beament said.
"Now we are investing in targeted exploration and
expansionary capital to continue advancing that inventory in our
pipeline of organic growth."
Both Evolution and Northern Star acquired Australian gold
mines from Barrick, which has sought to reduce debt by selling
assets after becoming over-leveraged to the U.S. dollar gold
price, which stands at around $1,161 an ounce - some $20
an ounce under its Jan. 1 level.
Australian dollar gold meanwhile has strengthened
by A$143 to stand at A$1,608 an ounce, thanks largely to a
weakening local currency.
Barrick's only remaining Australian asset is a half-stake in
the Super Pit mine, once Australia's biggest gold mine.
The other 50 percent is owned by U.S.-based Newmont Mining
($1 = 1.3829 Australian dollars)
(Reporting by James Regan; Editing by Stephen Coates)