Forbes Article - Aussie Iron Ore Billionaire Forrest Joins The Gold Rush

[CanisLycaon]

Nice to get some coverage in Forbes:

The rush which has driven the price of gold up by 25% since the start of the year has moved into a deal flow phase which is attracting some of the world’s richest people including Australian iron ore billionaire Andrew Forrest.

Greatland Gold, a London-listed explorer backed by Forrest, has agreed to buy the Telfer mine in Western Australia from U.S.-based Newmont Corporation for $475 million.

That deal, which has been brewing in the background for months, came within hours of AngloGold Ashanti agreeing to buy fellow London-listed gold miner Centamin for $2.5 billion.

This latest phase of consolidation in the gold sector started last year when Newmont bought Australia’s Newcrest for $19 billion, a deal which included the once prolific but ageing Telfer mine.

Newmont quickly earmarked Telfer as a surplus asset, starting a sales process which included a 70% share in the adjoining, but undeveloped, Havieron project.

Greatland, as the owner of the residual 30% in Havieron was always the logical buyer of Telfer which has a big but under-utilised ore processing system which will be used to treat remaining Telfer ore and new material from Havieron.

The challenge for the relatively small Greatland was always going to be the cost of buying Telfer with the $475 million price roughly the same as Greatland’s current stock market value.

Forrest’s 8.5% stake in Greatland and board seats held by close associates are the keys to a major fundraising currently underway to meet the cost of the Telfer purchase.

The addition of a gold mine to the basket of assets controlled by Forrest comes at an inflection point for the billionaire who has been looking to expand away from near total reliance on iron ore, a commodity in steep decline as Chinese demand falters.

Earlier attempts at diversification have focused on energy with investments in solar power and wind turbines and less successful attempts to commercialise green hydrogen made using renewable electricity.

The expansion by Greatland through the Telfer purchase comes after a 37% increase in the gold price since this year last year and a mirror image 37% fall in the iron ore price.

The iron ore slump has seen the price of Forrest’s major asset, Fortescue Metals Group, plunge 45% since the start of the year.

Gold, including a plan to redevelop the Telfer project using ore from the Havieron deposit could deliver a successful new business for Forrest which is not reliant on Chinese demand for iron ore which is expected to remain weak.

ING, a big Dutch bank, warned earlier today that the iron price could continue falling, placing more pressure on the fortune of Forrest and his family which has fallen by 28% from $19 billion to $13.5 billion over the past 12-months.

The addition of a gold asset could help stabilise Forrest’s declining wealth.

https://www.forbes.com/sites/timtreadgo ... gold-rush/