OceanaGold Corp. halted its shares in Sydney on Thursday ahead of announcing a possible business combination as a tumbling gold price drives a mergers and acquisitions boom.
The producer said in April it was seeking to buy more assets after agreeing to pay $101 million for Newmont Mining Corp.’s Waihi mine in New Zealand. Melbourne-based OceanaGold will remain halted until the start of trading on Aug. 3, unless an announcement is made.
Gold producers completed deals worth $18 billion last year, the highest annual total since 2011, as larger companies trim portfolios in an effort to lower costs and cut debt. OceanaGold had moved on from considering a takeover of Alacer Gold Corp., Chief Executive Officer Mick Wilkes said in April.
“For a combination you’d be looking at a business of a similar size,” Morgans Ltd. analyst James Wilson said by phone from Perth.
A declining gold price, which last week fell to $1,077.40, the lowest since February 2010, is spurring deals with asset valuations as much as 70 percent lower than in 2011, Evolution Mining Ltd. Executive Chairman Jake Klein said Thursday at a shareholder meeting in Sydney.