Saracen edgy on KalNorth talk
Saracen Mineral Holdings is preparing a takeover defence strategy in response to whispers moves are afoot to marry the company to Lawrence Freedman-chaired KalNorth Gold Mines.
Speaking on the sidelines of Kalgoorlie's Diggers & Dealers conference yesterday, managing director Raleigh Finlayson confirmed Saracen planned to appoint corporate advisers next week because ASX-listed explorer Timpetra Resources had bought a 4 per cent stake in Saracen.
Timpetra spent $4 million of its $6 million cash on Saracen.
Sydney investment company Iron Mountain is a substantial shareholder in Timpetra, and has also been buying KalNorth shares. It held 6.9 per cent in July. It is believed KalNorth's major shareholder, Hong Kong private equity firm Cross-Strait Common Development Fund, may also have acquired about 3 per cent of Saracen.
KalNorth suspended mining at the end of July, citing gold price weakness. The major tenement holdings of KalNorth and Saracen are next to each other and Saracen was toll treating KalNorth ore.
Mr Finlayson said he had yet to discuss the share purchase with Timpetra but had arranged a meeting.
"It may be as simple as they see a value proposition, or there may be something a bit deeper," he said.
Timpetra director Hamish Collins did not return calls for comment yesterday. Mr Freedman could not be reached.
A move on Saracen would end a relatively dry merger and acquisition spell in the WA gold industry. Besides the friendly tie-up of Perth-based but South America focused Troy Resources and Azimuth Resources, there have been few M&A plays this year as the gold price fell and producers focused on cutting costs and staying viable.
Corporate activity has also been dominated by asset sales by major producers, with Barrick Gold and Alacer Gold putting their mines on the market. The administrators of failed operations such as Apex Minerals and Navigator Resources are also seeking buyers for their assets.
Dealmakers and corporate advisers attending Diggers & Dealers say they had a busy week.
One senior industry figure told _WestBusiness _ he expected corporate activity to pick up in the December quarter.
Saracen shares ended 0.5¢ higher yesterday at 15.5¢, Timpetra shares were untraded at 5.8¢ and KalNorth shares ended 0.1¢ higher at 5.1¢.
