Gold Road Resources leads race for Tropicana mine stake The 30...

Gold Road Resources leads race for Tropicana mine stake

The 30 per cent interest in Tropicana would be a big bite for Gold Road, with a deal size matching its own market value.

• BRIDGET CARTER
  

Gold Road Resources is facing an anxious wait in the days ahead before learning if it has won the auction to buy a $1bn stake in the Tropicana gold mine from IGO.
Final bids were due at the end of last month.
Gold Road, advised by Royal Bank of Canada, is considered to be the frontrunner in the completion, so long as the joint owner of the asset, AngloGold, does not exercise its pre-emptive rights.
A dilemma for Gold Road — should it remain in the final stages of the race, as is the understanding around the market — will be funding the transaction.
Gold Road may look to launch a large equity raising only to find that AngloGold takes up its pre-emptive rights and buys the remaining interest.
One option could be a bridging loan.
READ MORE:Gold Road frontrunner for $1bn Tropicana stake

The company is thought to be close to JPMorgan as well as RBC and may look to the US funding powerhouse to gain financial support for a deal.

The 30 per cent interest in Tropicana would be a big bite for Gold Road, with a deal size matching its own market value, but analysts say it is in need of further earnings growth opportunities.

Another dilemma in the sale is that the gold price has come off the boil since IGO first put the interest in the business up for sale last year through investment bank Macquarie Capital.

Meanwhile, the other major auction drawing to a conclusion in the real estate space is Blackstone’s Milestone Logistics Group.

Final bids are due in the middle of this week, with five shortlisted parties in contention to buy the $3.5bn industrial property portfolio, including Logos, Dexus, ESR, Mapletree and AXA Investment.