Gold majors in mix for PNG pit

Another piece of PNG is up for sale on the international market with no say for the landowners or even the PNG government…

Hidden Valley

Bridget Carter and Gretchen Friemann | Business Spectator

Some of the world’s major gold miners could be eyeing one of Newcrest’s troubled Papua New Guinea assets, with suggestions China’s Xijin and South Africa’s Gold Fields may be among a list of bidders for its Hidden Valley ­project should it come up for sale.

However, Australian groups Northern Star and Evolution Mining aren’t expected to be in the mix.

Newcrest yesterday indicated it was mulling options for Hidden Valley, a gold and silver operation about 300km northwest of the PNG capital Port Moresby, that it jointly owns with Harmony Gold Mining.

The mine, one of three owned by Newcrest in PNG, has struggled to turn a profit since it started producing in 2010, and some question whether the asset, which produces more silver than gold, should be shut down rather than sold due to its troubled history.

For the December quarter, 17,000 ounces of gold and silver were produced.

It is understood the mine has operational issues and a cost structure that makes generating a profit challenging.

Still, every asset has a price, and offered at the right price it could prove attractive for an offshore bidder.

Xijin and Gold Fields were both understood to be among the suitors for Newcrest’s Telfer gold and copper mine in Western Australia when it was placed on the market last year through adviser Bank of America Merrill Lynch.

However, it was withdrawn for sale after offers for the asset failed to live up to Newcrest’s expectation, understood to be around $500m.

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Filed under Financial returns, Papua New Guinea

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