Australia鈥檚 Northern Star Resources (ASX:NST) has been signalled as the frontrunner to acquire Barrick Gold鈥檚 (TSX:ABX)(NYSE:GOLD) 50% stake in the Super Pit, once the country鈥檚 biggest open-pit gold mine, located in Kalgoorlie, Western Australia.
Barrick鈥檚 first attempt to sell its share of the mine, owned with rival Newmont Goldcorp (NYSE:NEM) (TSX:NGT), fell through in 2017, after Chinese bidder Minjar Gold failed to finance the $1.3 billion deal.
The Super Pit, once Australia鈥檚 largest gold mine, has gone from being a low-cost operation to the higher end of the cost curve
At the time, the Canadian gold giant didn鈥檛 rule out the possibility of selling its part to its joint venture partner. Rumours indicate that should Barrick not find a suitable bidder, it would try to talk operator Newmont Goldcorp into a joint sale of聽the entire asset, known as the Kalgoorlie Consolidated Gold Mines (KCGM).聽
Barrick鈥檚 boss, Mark Bristow, said during a 聽earlier this week that the Super Pit was the only asset in the company鈥檚 portfolio not performing as expected.
鈥淲hile it continues to be a valuable asset, we are moving down the road of selling our stake in this icon of gold mining,鈥� Bristow said. 鈥淲e are not the operators [and] we do not want to be passive investors in assets that we own.鈥�
Northern Star and Barrick have done businesses before. In 2014, the Aussie gold producer bought the Plutonic mine in Western Australia from its Canadian counterpart. It now belongs to Superior Gold聽(TSX-V:SGI), a junior majority owned by Northern Star.
The Super Pit has gone from being a low-cost operation to the higher end of the cost curve, mostly due to a partial collapse on the eastern wall of the mine last year. Additionally, the operation is expected to and when that happens, rehabilitation costs are forecast to run into hundreds of millions of dollars.