The selloff in Gold Fields (GFI -7.8%) shows no sign of abating, even as analysts say GFI got a good deal in its purchase of three western Australian gold mines from Barrick Gold (ABX +2.6%) for $300M; Cowen analysts calculate the mines are worth $513M.
GFI is paying the equivalent of $1,137/oz. of output from the mines based on annual production of 452K oz. and the equivalent of $115/oz. for reserves of 2.6M oz. vs. the North American group average of ~$280/oz.
An SBG Securities analyst in Johannesburg estimates the price paid per ounce is cheaper than the average paid between 1999 and 2012 in Australia.
For ABX, it's "a situation of doing the best you can with a bad hand."