Monday, 11 February 2013 14:38
Shares in one of Australia's largest gold companies Alacer Gold shot up after it pocketed $US171 million ($166.54 million) through the sale of an interest in a Western Australian mine.
Alacer's 49 per cent stake in the Frog's Leg gold mine at Kalgoorlie has been bought by Canadian joint venture partner and mine operator La Mancha Resources.
The sale had been predicted by some analysts, with the gold miner's Australian assets underperforming in a high-cost environment compared to its highly rated Turkish assets.
The company will pay $US70 million ($68.18 million) of that cash to shareholders through a special dividend.
Shares in Alacer, whose operations are in Turkey and Australia, had climbed 31 cents, or 7.3 per cent, to $4.58 by 1530 AEDT.
Alacer's CEO David Quinlivan said the sale had crystallised the full value of Frog's Leg and the cash would also be used to repay debt.
Alacer publicly criticised La Mancha at a conference at Kalgoorlie in 2011, accusing it of running an unsafe mine at Frog's Leg, which the operator rejected.
Alacer has forecast production of 330,000 to 365,000 ounces of gold in the 12 months to 31 December 2013 up from 328,098 ounces last year.
That puts it among Australia's largest gold producers behind Newcrest Mining, which is well ahead with production of up to 2.5 million ounces a year.
Alacer was formed two years ago through the $US2 billion merger of Canada's Anatolia Minerals and Australia's Avoca Resources but its share price has been punished, down nearly 60 per cent since early 2012.
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