Cheap gold mines disappear as bullion buyers splurge

New York

SO MUCH for the run on cheap gold mines. Producers who were forced by slumping prices to unload assets last year are regaining leverage.

With bullion off to its biggest rally to start a year in four decades - aided by the UK's vote to quit the EU - mine buyers are paying higher premiums and the pace of deals is accelerating, data compiled by Bloomberg show. The value of reserves held by major producers has almost doubled since the third quarter of last year, according to Bloomberg Intelligence.

The revival comes after a three-year slump led to losses, rising debt and a fire sale of assets. With valuations dropping, private equity firms and companies including Zijin Mining Group Ltd pounced. The number of acquisitions worth at least US$1 million rose 14 per cent last year to 192, the first increase since 2010, data compiled by Bloomberg…