Norton Gold May Seize on Gold’s Slump to Make AcquisitionsDavid Stringer
Norton Gold Fields Ltd., the Australian producer controlled by China’s Zijin Mining Group Co., said it may seize on the metal’s price slump to make more acquisitions.
“When the good opportunities come up, we will have a good look and take advantage of the current low gold price and the low market to grow our business further,” Chief Executive Officer Dianmin Chen said today in an interview.
Gold fell into a bear market in April as some investors lost faith in the metal as a store of value and investment holdings contracted. Zijin, China’s biggest gold miner by market value, said last year it’s targeting spending of as much as 10 billion yuan ($1.6 billion) annually on acquisitions and expanding mines.
“We have not set up a time frame for when we need to get one done, but our strategy is to keep looking,” Chen said. Zijin will support Norton in making further acquisitions in Australia, he said.
Norton, which last month made a takeover offer for Kalgoorlie Mining Co., rose 3 percent to 17 Australian cents at the close of trading in Sydney today. The stock has dropped 17 percent this year, compared with an 8.9 percent advance in the benchmark S&P/ASX 200 Index.
Barrick Gold Corp., the biggest producer by sales, is working with Bank of America Corp. and UBS AG on a possible sale of three gold mines in Australia, two people with knowledge of the matter said April 20.
Chen, who managed one of the three mines during a 10-year career with Barrick until 2007, declined to say whether Norton had, or planned, to bid for the mines.
“Barrick is a good company, and the assets must have a good value as well,” he said. “We have got a desire to grow in Australia, our strategy is to increase gold production and to cut production costs. We are looking at any opportunities which can help us to achieve this strategy.”