Mike Fraser’s starting months at the helm of multinational miner Gold Fields have been convoyed by record precious metal prices, but WA’s budding new gold finds are a touch too expensive for the Durban native to be making any sudden moves.
Mr Fraser told The West Australian that M&A was “not off the table” for the South African heavyweight gold miner, which has a rock solid foothold already in WA through its four existing mines, producing about 50 per cent of the company’s total annual output.
Gold Fields’ St Ives, Granny Smith, Agnew and Gruyere mines pumped out more than 1 million ounces in 2023 and the company has stakes in several listed gold juniors, including Magmatic Resources, Lefroy Exploration, Lunnon Metals, Hamelin Gold and Great Southern Mining.
The new chief executive thinks Australia’s listed gold companies are “a little bit too expensive” but that Gold Fields was keeping its options open and “not opposed” to doing deals if it found something that met quality and value criteria.
“Bolt-ons of single asset companies, or single asset development options are the kinds of things that are probably of interest to us,” he said.
“We continue to scan the market in Australia, I would say that gold equities on a listed basis are relatively more expensive than elsewhere in the world.”
Mr Fraser also kept his cards close when asked about what the company’s options were for the Gruyere mine, which it owns half of and operates alongside ASX-listed joint venture partner Gold Road Resources.
Gold Roads chief executive Duncan Gibbs in January took some not so subtle swipes at mining contractor MACA as well as its joint venture partner in January, saying the Gruyere wasn’t performing as it should be.
“We’ve had a few difficulties in the last number of months with contractor performance on site. But we’re certainly working very well together with Gold Road to sort that out and also working with them on what the future development of that asset looks like,” Mr Fraser said, affirming they had a “good partnership”.
“There’s no discussion at this point in time about either of us moving on each other or on our position in terms of Gruyere.”
Adding more intrigue to the dynamic is Gold Roads’ sizeable stake in De Grey — a junior developing a potentially mammoth Australian gold mine out of its Hemi deposit in the Pilbara.
“De Grey’s an interesting asset, and we’ll continue to look at it with interest. But at this stage, from the outside it’s quite expensive with a big capital bill to develop it,” Mr Fraser said.
For now, a big focus in the State will be pushing ahead with a $296m renewables project to power its St Ives mine, where it plans to install seven wind turbines generating 42 megawatts of wind power and 60,000 solar panels delivering 35MW of solar.
“What we were finding is that power purchase agreements are coming in at pretty heavy price points, and then you don’t get the benefit of the cost reduction in the asset.
“That’s why we decided to go down the path of putting our own capital to work and owning it ourselves.”
Gold Fields has set target to reduce scope 1 and 2 emissions by 30 per cent by 2030 and expects the new renewables base will be operational by the end of 2025.
Gold prices have also continued to break records in the past 12 months, with a new zenith set only this week after touching $US2141.79.
Mr Fraser said strong central bank buying from non-Western countries like China and Russia were helping boost prices.
“if you look at gold demand as well, jewellery purchases still remain a significant part of gold demand and with India’s rising affluence, that’s providing support, and equally in China.”