An avalanche of dealmaking is coming in the WA gold space

Gold M&A to ramp up in 2025: Hedley Widdup
Battle for third place in Aussie gold puts eyes on Ramelius and Westgold
Juniors also in mood to consolidate with prices over $4600/oz

While many gold producers have missed the boat on countercyclical M&A, with prices over $4600/oz in Aussie dollar terms, the Western Australian landscape has plenty of deals waiting to happen.

Northern Star Resources (ASX:NST) announced the $5 billion scrip acquisition of Pilbara developer De Grey Mining (ASX:DEG) in December, which could kick off a new wave of consolidation.

At the Resources Rising Stars Summer Series in Brisbane a fortnight ago, Lion Selection Group (ASX:LSX) CEO and managing director Hedley Widdup said his big theme for 2025 was M&A, with a particular focus on gold.

“The question is why 2025 and why not 2024? It was starting in 2024, but M&A cycles typically have a big wind-up where people are getting ready and looking at things,” he said.

“I know a number of companies looking at each other so that confirms my belief.”

Widdup noted the margins of gold miners were expanding due to the record gold price, turning their focus to growth.

“There are enough processing plants through the thickest parts of the Goldfields in Western Australia to not need to build another one, so if you have a large resource, you’ve got two exit points,” he said.

“You can build one, or there’s a potential outcome where you get bought by somebody else, and I think that’s probably something which we’ll see in 2025 as these inquiries start to thicken up.

“There is a definite financial ability to do it, and as these miners switch towards growth, it’ll definitely be the driver.”

Mystery in the Murchison

In WA’s Murchison region, there have been two main players, Ramelius Resources (ASX:RMS) and Westgold Resources (ASX:WGX).

“Those two are the classic big two competitors now in Western Australia, because they are both frantic to grow and become the definite third largest producer in Australia,” Widdup said.

At one stage, the pair were in talks about a potential combination, but Westgold ended up acquiring Toronto-listed Karora Resources in mid-2024.

“Let’s fast forward 12 months. They’re probably also still looking at a multitude of other things, both of them looking at them, and only one of them can own them,” Widdup said.

Widdup pointed out that Ramelius possibly had the upper hand, with a 19.9% stake in high-grade developer Spartan Resources.

“Everybody wants to know how that will work out, and that’s a combination which could cement that third-biggest spot [for Ramelius],” he said.

Spartan’s high-grade Never Never discovery is 65km from Ramelius’ flagship Mt Magnet operation.

“So you can understand why they’re interested in what we’re doing,” Spartan managing director Simon Lawson told the RIU Explorers Conference last week.

“We’ve also got 3Moz, which doesn’t hurt.”

Leonora-Laverton intrigue continues

Genesis Minerals (ASX:GMD) and the then-Silver Lake Resources’ drawn-out battle for the Gwalia operation in Leonora may be over – with Genesis victorious – but that hasn’t stopped the speculation.

Silver Lake subsequently merged with Laverton producer Red 5 and became Vault Minerals (ASX:VAU).

The market has since turned its attention to a potential tie-up between Genesis and Vault.

“While we will continue to assess M&A opportunities, we believe that in the current gold price environment we stand to make the best returns by developing our pipeline of organic growth opportunities,” Genesis managing director Raleigh Finlayson said in the company’s half-year results release last week.

Another growing player in the region is developer Magnetic Resources (ASX:MAU), owner of the 1.92 million ounce Laverton project.

Magnetic’s ground is only 10km from Genesis’ newly restarted Laverton mill and 15km from Gold Fields’ underutilised Granny Smith plant.

“We do have a data room open to a number of players,” Magnetic managing director George Sakalidis told the RIU Explorers Conference last week.

“At the same time, we are progressing the feasibility study in our own right.”

The junior consolidators

There’s a new breed of gold developers emerging in WA, including Astral Resources (ASX:AAR), which owns the 1.27Moz Mandilla project outside Kalgoorlie.

Chaired by known dealmaker Mark Connelly, Astral launched a takeover offer for smaller neighbour Maximus Resources (ASX:MXR) in late December.

The acquisition is more about tenement consolidation than resources as it is expected to smooth the pathway to the development of Mandilla.

Connelly also chaired Alto Metals, which was recently acquired by another up-and-comer, Brightstar Resources (ASX:BTR).

As well as acquiring Alto to consolidate the Sandstone district, Brightstar also bought unlisted Linden Alliance last year and merged with Kingwest Resources in 2023.

Speaking at the RIU Explorers Conference, Brightstar managing director Alex Rovira said the average enterprise value per ounce of gold acquired in WA recently had been around $100/oz.

“Brightstar has acquired 2.5Moz at $36/oz, so we feel like we’ve been quite smart and targeted with our M&A opportunities over the past two years, really seeking to get ounces into this business that we think genuinely come out of the ground,” he said.

“We’re not land-banking projects – we have a team of developers and miners that want to dig this out of the ground.”

The hunger to grow was further demonstrated by the move this week from Black Cat Syndicate (ASX:BC8), which will pay up to $85 million to buy Westgold’s non-core Lakewood Mill south of the Super Pit. It highlights the race between juniors for infrastructure to solidify the long-term future of their gold operations.

Alkane Resources (ASX:ALK) backed Medallion Metals (ASX:MM8) is conducting due diligence on a plan to transform IGO’s disused Cosmic Boy nickel plant to process gold from its Ravensthorpe project in the southern WA Goldfields, BTR owns its own plant near Laverton, Auric Mining (ASX:AWJ) recently extended due diligence over the small Burbanks mill near Coolgardie and Horizon Minerals (ASX:HRZ) merged with Poseidon Nickel to acquire its Black Swan mill, also with the view of retooling to produce gold.

READ: Ten Bagger: Gold companies with infrastructure taking a front seat in the boom

At Stockhead, we tell it like it is. While Medallion Metals, Astral Resources, Brightstar Resources, Magnetic Resources and Spartan Resources are Stockhead advertisers, they did not sponsor this article.