Chinese company walks away from $1.3bn Barrick Super Pit acquisition

Barrick Gold’s plan to sell its 50 per cent stake in the Super Pit gold mine in Kalgoorlie for $1.3 billion has fallen through after the Chinese buyer decided to abandon the deal.

Shandong Tyan Home, parent company of Australian gold producer Minjar Gold, announced on the Shanghai Stock Exchange that negotiations for the deal had ended due to new capital and acquisition rules in China.

“The company is no longer pursuing this project,” Shandong Tyan said in the exchange announcement.

Barrick has been open to offloading its share in the Super Pit for at least 18 months. The Canadian company has undertaken an extended process of consolidating its operations to reduce debt and increase its cash position.

Shandong Tyan’s interest in Barrick’s share was first reported in November 2016, with its offer said to be significantly higher than bids from Australian, Chinese and Canadian rivals.

One rival to the Chinese company was US gold miner Newmont Mining, owner of the remaining 50 per cent of the Super Pit operation. However, Newmont has previously said that pricing had halted its acquisition efforts.

The Super Pit – Australia’s largest open pit gold mine – produced 754,000 ounces in 2016, the second highest output in the country behind the Boddington operation, according to Surbiton Associates.

Meanwhile, Hanking Australia has confirmed the completion of its $330 million sale of the Southern Cross gold operations in Western Australia to Shandong Tianye Group, the parent company of Shandong Tyan.

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