Saracen Mineral (ASX: SAR) has announced a large acquisition to investors this morning, whilst also revealing a capital raising.
Saracen is one of the larger gold miners listed on the ASX with an annual production of more than 300,000 ounces per year from its Carosue Dam Operation and its Thunderbox Operation.
Saracen’s Large Acquisition And Capital Raising
Saracen Mineral has announced that it has entered into a binding sale agreement with Barrick Gold Corporation to acquire its 50% interest in the Kalgoorlie Consolidated Gold Mines Joint Venture with its purchase of 100% of the shares of Barrick (Australia Pacific) for US$750 million.
KCGM JV owns and operates the Super Pit gold mine in Kalgoorlie-Boulder, Western Australia.
Saracen described the Super Pit mine as a large, high quality, long life open put and underground gold mine located in the Golden Mile Region of Kalgoorlie-Boulder. It has produced more than 60 million ounces of gold and produced 490,000 of holding in FY19, making it one of the largest gold mines in Australia.
Newmont Goldcorp Corporation is described by Saracen as the world’s leading hold company and will remain the joint venture partner with its 50% ownership and operatorship of the mine.
Management are excited by the acquisition because it is consistent with the company’s strategic objective to future proof the business. The mine has a reserve of 7.3 million ounces, representing a reserve life of around 12 years at historical production rates.
In the past five years it has produced an average of 660,000 per year at an all-in sustaining cost (AISC) of A$1,100 per ounce.
The company said that it will be a highly accretive acquisition for shareholders across a broad range of metrics including profit / earnings per share, cash flow per share and net asset value per share.
Capital Raising
Saracen intends to raise A$796 million at $2.95 per share (a 13% discount to the closing price) via an underwritten institutional raising and an underwritten 1 for 5.75 pro-rata accelerated non-renounceable offer to partly fund the transaction, the rest will be funded by a new A$450 million facility.
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