Norton Gold Fields Ltd., the Australian producer controlled by China’s Zijin Mining Group Co., is seeking further acquisition targets as falling prices cut the value of mines.
“We never hide our desire to grow, we never hide our interest in good assets, which are going to fit into our portfolio,” Chief Executive Officer Dianmin Chen said in an interview. “That’s what our business development team are doing, they are looking into various assets.”
Zijin, China’s biggest gold miner by market value which bought Norton last year, said in 2011 it aimed to spend as much as 10 billion yuan ($1.6 billion) a year on acquisitions and expanding mines. Gold, which has dropped 23 percent this year, entered a bear market in April.
Norton expects to complete a deal within the next few weeks, for Kalgoorlie Mining Co. Ltd., Chen said in the interview yesterday at the company’s Paddington mill, 35 kilometers (22 miles) north-west of Kalgoorlie in Western Australia.
Barrick Gold Corp., the world’s largest producer, is seeking to dispose of some Australian assets and Alacer Gold Corp. said Aug. 5 it was near the end the process of selling its two Australian gold mines.
Zijin is considering a bid for Barrick’s Australian assets, Lan Fusheng, vice chairman in charge of overseas investment said June 20. Fusheng also said Zijin had concerns about high production costs in Australia.
“I’m not going to point out any particular assets, but if it’s a good one then we would be interested,” said Chen, who declined to discuss any bid for Barrick’s mines. He said the producer is focused on studying possible acquisitions only in Australia.
Norton has already seized on Barrick’s decision to scale back on development work to acquire a fleet of trucks and mining equipment from the larger producer, Chen said.
With gold companies from Canada to New Zealand announcing more than $20 billion in writedowns on the value of their assets in the past two months, Chen said Norton would avoid taking any impairment charges. “We don’t need to have impairments because we have been able to get on with our cost reduction and maintain our asset value.”