Newcrest eyes further divestments

Business, Main Stories

The National – Friday, June 17, 2011

GOLD giant Newcrest Mining, the operator of Lihir gold and joint operator of Hidden Valley mine could be eyeing more divestments, with its Bonikro operation in the Ivory Coast, Africa, tipped to be next on the list.
As analysts backed Newcrest’s move yesterday to vend two Queensland gold mines into a new entity, Royal Bank of Scotland said a similar deal was “likely” for Bo­nikro, which it acquired through its US$10 billion acquisition of Lihir Gold.
According to The Australian newspaper and other industry sources, the Bonikro mine produces about 86 thousand ounces of gold per annum, or 3% of group production, which is less than the about 5% contributed by Newcrest’s “non-core” Mount Rawdon and Cracow mine it plans to divest.
This made Bonikro “effectively an exploration play”, RBS analyst Sam Berridge said, and Newcrest’s preference for exploration expenditure lay in PNG, referring to Hidden Valley mine, joint venture with Harmony Gold and Highlands Pacific and its sole operation in Lihir.
“Newcrest is also likely to divest its Bonikro operation and surrounding exploration assets once the political situation in the Ivory Coast stabilises,” he said.
Perseus Mining is an obvious fit for Newcrest’s Ivory Coast assets given Perseus’ regional focus.
Perseus has a number of tenements in northern Ivory Coast, with its main focus in the African nation the Tengrela gold project.
Newcrest on Wednesday unveiled plans to vend Mount Rawdon and Cracow into a merger between Catalpa Re­sour­ces and Conquest Mining in return for an eventual 33% of the new entity. The agreed deal scuttled St Barbara’s US$350 million takeover of Catalpa, with the spurned suitor yesterday saying it was reviewing its “position”.
“The deal makes sense and is a positive move,” Berridge said.
Meanwhile, its Lihir operation remains closed after the high voltage gear which failed last week is rectified.
According to a statement released last week, operation is expected to resume in two weeks time.