Chinese race to grab Barrick’s stake in Super Pit hits roadblock

Canada’s Barrick Gold put its half of Australia’s biggest-producing gold mine on the market in July 2016. (Image: Chris Fithall | Flickr Commons.)

Barrick Gold’s (TSX, NYSE:ABX) planned $1.3 billion sale of its stake in Australia’s Kalgoorlie mine has hit a roadblock as Minjar Gold, the Chinese bidder, has been unable to secure financing for the deal.

Minjar Gold is still waiting for Chinese regulatory clearance and hasn’t been able to secure funding for the $1.3 billion deal.

The Perth-based firm, a unit of Shanghai-listed Shandong Tyan Home, is also still waiting for Chinese regulatory clearance to go ahead with the acquisition, people with knowledge of the matter told Bloomberg.

Minjar Gold has been on the hunt for Australian mines for over a year. In August it purchased Evolution Mining’s (ASX:CAH) Pajingo mine for $40 million — a deal that looks like small change in comparison to the offer on the table for Kalgoorlie.

But if it fails to get its hands on Barrick’s 50% stake in the vast Western Australia mine, then the company may decide to re-enter talks with other buyers, including its joint venture partner Newmont Mining (NYSE:NEM), which owns the other half. Price, however, has been an issue and a deal has so far eluded the Denver-based company. 

Another option for Barrick, the world’s No.1 gold producer, would be to keep the asset, which is Australia’s largest open-pit gold mine.

The Super Pit is expected to be depleted of ore by 2029 but underground mining could continue after that.