Alacer Gold Corp. (ASR), the third-biggest gold company traded in Australia, replaced David Quinlivan as chief executive officer and said it will mothball its mines there within 18 months if they aren’t sold.
Chief Financial Officer Rodney P. Antal, took over from Quinlivan immediately, Englewood, Colorado-based Alacer said today in a statement.
Alacer, which also mines gold in Turkey, sold its stake in an Australian mine in February and is seeking to sell its two remaining assets there after taking charges of $902 million on the unit since the last quarter of 2012. Gold producers have announced writedowns of at least $26 billion over the past two months as bullion has tumbled 20 percent this year.
“Given the recent volatility in the gold price and the time taken to secure an acceptable binding offer for the Australian operations, we have decided to pursue a strategy aimed at maximizing near-term cash generation,” Antal said in the statement. The strategy is “likely to lead to both of our Australian operations being transitioned into care and maintenance during the next 12-18 months” should there be no significant increase in gold, Antal said.
Gold for immediate delivery traded at $1,334.61 an ounce at 9:45 a.m. in Sydney. Alacer climbed 4.4 percent to A$2.62 at 10:27 a.m. in Sydney.
Alacer may receive less than A$600 million for the Higginsville and South Kalgoorlie mines in any sale, Credit Suisse Group AG analysts led by Michael Slifirski wrote in a note to clients dated June 13.
Possible buyers for the South Kalgoorlie mine may include Zijin Mining Group Co., and La Mancha Resources Inc., which already acquired Alacer’s stake in the Frog’s Leg joint venture in Australia, Slifirski wrote.
The sales process “is continuing and discussions with a number of interested parties are well-advanced,” Alacer said. Quinlivan had said last week he expected Alacer to announce next month whether a sale had been agreed.
Alacer reiterated its production guidance for 2013 of between 168,000 ounces to 187,000 ounces of gold. It said it would cease almost all exploration activities in Australia and make additional cuts to mine development at Higginsville.
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