From The Australian ~2 Hours ago.
The sale process for the $1.4bn listed gold miner Bellevue Gold is now in the second round, with Vault Minerals and Regis Resources said to be going head-to-head.
The $3bn Vault is believed to be self-advised in the competition and sources say the motivating factor for the West Australian gold miner is that its Deflector gold and copper mine, 450km north of Perth, which produces about 139,000 ounces of gold, is at the end of its life. Its King of the Hills processing facility near Leonora, 900km northeast of Perth, is also known to be a challenging asset.
However, sources believe Regis Resources is the front runner to buy Bellevue after putting forward a low ball offer for Ravenswood gold mine that excluded it from the competition for the Queensland mine.The only other bidder was understood to be United Tractors, out of Indonesia.
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Other suitors that have been taking a look at Bellevue are understood to include Genesis Minerals, although sources believe it is unlikely that the Raleigh Finlayson-led business will pursue the opportunity. Likewise with Evolution Mining.
There was talk earlier that Northern Star was tipped to be a contender, but it is now understood it is not involved, as it concentrates on bedding down its acquisition of De Grey Mining.
Bellevue hired investment bank UBS to run a sales process of its Bellevue Gold Project 430km north of Kalgoorlie, after downgrading its production guidance and in April launching its second equity raising in a year to close out part of its hedge book.
Some believe that the market is overvaluing the group’s flagship asset with it trading at $1.4bn.
They have suggested that production forecasts need to be set even lower – towards the 100,000 to 120,000 ounces of annual gold output.
Bellevue Gold is hundreds of millions of dollars out of its hedge book as the gold price trades at record prices above $5000 an ounce, about double the level hedged at, which would be factored into the price for a suitor.
Parties have been accessing a data room after making informal approaches, and the understanding is that there was not a formal sale process afoot.DataRoom understands that only Australian groups were in the mix to secure more production at a time when gold’s price surge shows no sign of abating, rather than for synergies.
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