- 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."
Analysts say Gold Fields got a good deal in mine purchase
Aug 22 2013, 14:25 ET