Saracen Mineral Holdings is set to become the half owner of the Super Pit gold mine in Kalgoorlie by the end of the week.
The company last week emerged as the successful bidder for Barrick Gold’s 50 per cent interest in the Super Pit mine for $1.1 billion.
Western Australian Minister for Finance, Aboriginal Affairs and Lands Ben Wyatt has given Saracen consent to purchase the Kalgoorlie Super Pit stake, with the transaction now unconditional and ready for completion on November 29.
Saracen has also hedged an additional 200,000 ounces of gold at an average price of $2187 per ounce, with scheduled deliveries out to the December quarter 2022.
The hedging will take advantage of a strong Australian-dollar gold price and provides Saracen with further financial certainty while it repays the $400 million debt used to help fund its purchase of the Kalgoorlie Super Pit stake.
Saracen managing director Raleigh Finlayson said the new hedging was a prudent move to underpin the debt repayment associated with the recent acquisition of the Kalgoorlie Super Pit.
“The acquisition of a half-share in the Super Pit gives Saracen an asset with more than 10 years of life based on existing reserves alone, with a pipeline of further growth opportunities underpinned by additional resources and outstanding exploration upside,” Finlayson said.
“The latest hedges ensure that we maintain strong financial certainty while we repay the money, we have borrowed to help drive this exceptional growth rate and the expansion of our overall gold inventory in a Tier 1 location.
“This combination is consistent with our overall objective of generating the growth which helps our shareholders achieve out-performance while capping our financial risk.”
Following these latest hedges, Saracen’s total hedge book compromises 541,500 ounces at an average delivery price of $1990 per ounce.