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Saracen and AngloGold
get it done
Saracen Mineral Holdings Ltd “The timing was interesting,
has attracted interest over
ground in Western Australia from had it been two months prior, you
gold major AngloGold Ashanti Ltd.
might have seen people hang-
Subject to conditions, including
FIRB approval, AngloGold can ing off the rafters trying to get in
earn up to 70% interest in Sara-
cen’s Butcher Well and Lake Car- there,†Finlayson said.
ey tenements.
“Gold had come off a bit, sen-
By fulfilling the first milestone
of spending $15 million – $6 mil- timent had come off a bit, but it
lion of which has to be commit-
ted to project expenditure within certainly wasn’t subdued, it was
four years – AngloGold can earn
51% of the Lake Carey tenements probably at the right tempera-
abutting its Sunrise Dam mine.
ment, and equities had done well.
After the first farm-in period,
AngloGold can increase its stake For the Aussie space, the year
to 70% by spending a further $10
million within two years. prior was our big year where there
Despite budgeting $42 mil- was a big disconnect between
lion on exploration this year, only
about $1 million had been set aside for Australian dollar and US dollar
work on Butcher Well and Lake Carey,
Saracen managing director Raleigh Fin- gold price, which was very re-
layson told Paydirt.
warding for Australian producers.â€
Assuming the farm-in deal pro-
ceeds in a timely fashion, AngloGold An increase in interest rates
could be hitting Butchers Well and
Lake Carey “hard†early in the New and the outcome of the US elec-
Year.
tion – particularly if Republican
“The AngloGold guys are champ-
ing at the bit and will basically spend candidate Donald Trump suc-
more than $30 million over the next
six years, all going well. It is clearly Raleigh Finlayson ceeds – later this year could see
more than what we would have done, another surge in the gold price in
so from our perspective it was pretty
much a no-brainer,†Finlayson said. coincided with the Denver Gold Forum, the New Year.
Discussions between Saracen and which created a different atmosphere for Any uptick would be timely for Saracen
AngloGold started prior to Diggers &
Dealers this year, around the time the the local contingent that attended this as it looks to hit a run rate of 300,000
gold price was taking off.
year’s show. ozpa gold production from its two oper-
Since then, the gold price has re-
tracted from a two-year high in July of ating centres – Carosue Dam, north-
above $US1,350/oz to $US1,262/oz at
the time of print. east of Kalgoorlie, and Thunderbox,
The recent tailing off has been felt south-east of Leinster.
among Australian gold producers,
with Northern Star Resources Ltd fall- Becoming a mid-tier Australian gold
ing from all-time highs of $5.78c/share
in July to $3.97c/share and Evolution producer is a strategy Saracen has
Mining Ltd $3.06c/share to $2.24c/
share during the same period. been pursuing and with a large chunk
Saracen also felt the correction, of money committed to exploration
with its share price dipping about 40%
to $1.23c/share in mid-October. and growing organically, it is unlikely
The Australian gold stock plunge the market will see the company sign-
off on any big deals in the near future.
“There is only so much manpower
you can put on to that, so what you’ll
find this year is a heavy focus on or-
ganic [growth], but at the end of the
day, certainly this environment we are
seeing right now is better than it was
three months ago to find deals,†Fin-
layson said.
“It probably hasn’t flushed out
completely because of the corporate
transactions or project level deals, so
if gold takes a bit more of a turn down
opportunities will probably be a bit
greater. So, not at this stage but much
further down the track we may turn
our attention to those [M&A] options.â€
– Mark Andrews
AngloGold can earn up to 70% of tenements to the
west of Sunrise Dam in a farm-in deal with Saracen
AUSTRALIA’S PAYDIRT NOVEMBER 2016 PAGE 5
