Australian gold miner Kingsgate to buy Dominion Mining
20 Oct 2010
Australian low cost gold producer Kingsgate Consolidated Ltd, today said that it has agreed to buy Dominion Mining Ltd for A$376 million ($367 million) in shares, to create a premier mid-tier gold producer in Australia.
Kingsgate will offer A$3.63 a share, a premium of 33-per cent to Dominion's closing price on 20 October, valuing the Perth-based gold miner at A$376 million.
Dominion, a publicly listed gold producer and explorer, has a gold mine in South Australia and a few prospective exploration projects spanning three Australian states.
Dominion's key asset is its wholly owned Challenger Gold Mine located in South Australia, which has a 7-year mine life based on current annual production levels of around 100,000 ounces
The mine has been in production since October 2002 and has produced 566,635 ounces of gold to the end of June 2009
Kingsgate produced 133,628 ounces during 2010 year ending 30 June, while Dominion produced 80,570 ounces. The merger has the potential to raise production to 300,000 ounces.
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