Klmarc posted this the other day on the EXG thread,
Article below from the AFR's website. Have a nice read, knowing that EXG is VERY nearby Norton, almost the only one.....!
Chinese-controlled gold miner Norton Gold Fields is hunting for acquisitions that could double its production to 300,000 ounces a year within three to five years, says chief executive Dianmin Chen.
China’s largest gold miner, Zijin Mining, owns an 89 per cent stake in the West Australian gold miner following a takeover offer last year. But Mr Chen said that rather than mop up the rest of the ASX-listed miner, Zijin’s intention was to keep it listed and to increase its capital base and attractiveness to outside institutional investors through acquisitions.
“Our strategy is to increase gold production, reducing our costs and growing our business,” he told The Australian Financial Review on the sidelines of the Mines and Money conference in Hong Kong on Monday.
Norton expects to produce 154,000 to 162,000 ounces of gold from its Paddington operation near Kalgoorlie this year at a forecast C1 cash cost of $990 to $1090 an ounce.
“We would like to get rid of the high cost production nametag to make Norton more profitable,” Mr Chen said.
The company is investigating options to boost production such as heap leaching of lower grade ore, but Mr Chen said an acquisition would be required to meet Norton’s overall production goal.
He said there was no minimise size if a purchase offered synergies with existing operations, but added: “We are not afraid to look at big ones.”
Mr Chen, who was born in China but educated in Australia, joined Norton last year following the Zijin takeover. He had previously worked elsewhere in Australia and Canada in the mining industries with companies including Barrick Gold and CITIC Pacific.
Most of Norton’s operational team remained in place following the Zijin takeover, and Mr Chen said the goal was to use the benefits of lower cost Chinese financing to grow a profitable Australian mining company.
“Norton provides a good platform for Zijin to grow outside of China,” he said.
Zijin has a market value of around $US12 billion and its only other overseas mines are located in Central Asia.
Mr Chen said institutional investors in the London market in particular had expressed interest in taking up shares in Norton if the free float was boosted.
“A lot of investors are not really too worried about the Zijin factor,” he said of potential concerns about corporate governance and Chinese control. “They see positives in Zijin because they can provide easy and low interest finance facilities.”
He said the current structure, in which Zijin owned 89 per cent, was not proving positive for the share price.
PXG Price at posting:
25.1¢ Sentiment: Buy Disclosure: Held
