ASX-listed gold miners arrive at Diggers & Dealers with more than $7.5b in cash and bullion

Local gold miners are making the annual pilgrimage to Kalgoorlie-Boulder with piggy banks bursting at the seams.

The Diggers & Dealers Mining Forum begins on Monday in Australia’s gold heartland after a record year for the precious metal.

Gold miners were already flying high at last year’s Diggers & Dealers and since then bullion’s value in Australian dollar terms has surged another 38 per cent to $5199 an ounce.

ASX-listed producers of the precious metal are now flush with funds — collectively holding more than $7.5 billion of cash and bullion at June 30.

How those riches will be spent, or not spent, is set to dominate conversation among the 2000-plus attendees at the three-day conference.

“Perhaps they could be used for further acquisitions although prices now paid to obtain such new assets are very high,” Surbiton Associates director Sandra Close said.

“The concern is that the larger the cash reserves become, the more the company may become a tempting takeover target.”

Dr Close, who has been a gold industry analyst for three decades, said there was “another rather obvious solution”.

“I am sure that shareholders would love to see higher dividends.”

A wave of consolidation has already swept through the gold industry over the past 18 months, with about $9 billion of mergers between Red 5 and Silver Lake Resources, Westgold Resources and Karora Resources, and Ramelius Resources and Spartan Resources.

Gold mines and early-stage developments have also been snapped up at a premium left, right and centre across WA.

South Africa’s Gold Fields in May shook hands with Gruyere mine partner Gold Road Resources to buy its half stake in the Goldfields project for $3.7b in cash and shares.

A day prior to this handshake, Northern Star Resources wrapped up its all-stock deal to take control of De Grey Mining and its prized Hemi development in the Pilbara for $6b.

Northern Star chief executive Stuart Tonkin believes another wave of consolidation could soon be on the way.

“Going back a few months, I would have said that perhaps things were a bit hot and elevated, but there’s been a lot of retraction in equities,” he said.

“And I think, if anything, that motivates a catalyst for more mergers and acquisitions.”

Mr Tonkin said Northern Star was preoccupied bedding down the De Grey purchase but he expects there will be deals done at the “junior end of town”.

Northern Star has the biggest pile of cash and bullion among miners listed on Australia’s bourse. It held $1.9b at June 30, well ahead of Ramelius in second place at $810m.

Evolution Mining had $760m, Vault Minerals $686m, Greatland Gold $575m and Regis Resources $517m as the other local miners with liquid asset balances over half a billion dollars by the end of the 2025 financial year.

While gold chiefs are poised to chest-beat at Kalgoorlie’s Goldfields Arts Centre’s lectern, their battery metals counterparts will cut forlorn figures for the second year in a row.

Some, like IGO’s Ivan Vella, have decided not to front.

WA’s once-thriving nickel industry is one mine closure away from complete collapse, lithium remains in the doldrums and no local rare earth element explorers of note had a bumper year.

Uranium has also lost its glow. The radioactive commodity became a hot topic at last year’s Diggers & Dealers after former Coalition leader Peter Dutton gatecrashed the conference to spruik his nuclear energy policy.

Mr Dutton’s election failure in May and weakening uranium prices over the past 12 months have largely killed the hype.

Notable absences at this year’s forum include the three biggest miners in the State — BHP, Rio Tinto and Fortescue.

Fortescue presented last year via Kristen Pelc, a corporate development manager, and BHP had a booth — infamously an empty one after announcing a month prior to the conference that its sprawling Nickel West arm would enter into care and maintenance.