Gold’s stubborn strength is pushing spreadsheets ahead of drill holes. And Dollar Bill sees more moves forming, with some left-field possibilities. There’s Kingsgate/Emerald in South East Asia, Capricorn and Bellevue - despite their distance - and perhaps some Leonora adjacency tidies make sense. There may be more on the home front, while in Africa, Perseus and West African Resources look like a regional fit.
When gold refuses to come off the ceiling, CEOs stop comparing drill hits and start comparing balance sheets. Consolidation among the mid-tiers is already on the move - think Westgold and Karora, Silver Lake and Red 5, Ramelius and Spartan and Gold Fields’ tilt at Gold Road. Given the current climate, Dollar Bill suggests the whiteboards aren’t wiped just yet - in fact, far from it. It’s not just about the deals already done, but importantly, the ones that could be next on the cards.
Over the past few weeks, it’s been hard trying not to stare at the gold ticker flashing across the big screen at the club - perhaps a bit like a teenager refreshing TikTok every couple of minutes. Spot gold keeps winking at fresh highs and refusing to give back ground. Deutsche Bank just bumped its 2026 target price to US$4000 (A$6100) an ounce, politely reminding everyone that central banks are still vacuuming up gold bars. UBS played the same card, raising its target price for next year to US$3900, and the United States Federal Reserve last week cut rates for the first time this year.
When spot prices are this rich for this long - and there’s expectations for even more upside - people tend to start pricing deals more than they price drill holes.
And the debate isn’t whether consolidation is coming - we’re mid-montage already. Westgold and Karora tied the knot to make a +400,000-ounce per annum, Australian-centric mid-tier. Silver Lake and Red 5 did their “merger of equals” and re-badged the fleet. The rambunctious Ramelius completed its Spartan acquisition with cash and script, and South Africa’s Gold Fields also slapped a $3.7 billion tag on Gold Road to take full control of the Gruyere gold mine in Western Australia’s Yilgarn Craton, which produced almost 290,000 ounces last year. That should tell you what big, steady ounces in WA are worth at this point in the cycle.
The banter around the club now is: what’s next? Through that smoke-filled haze, Dollar Bill couldn’t help but take note that the conversation among the members keeps returning to a few scenarios that, on sober reflection, sound like they’d be worth more than a back-of-the-napkin scribble.
Let’s start in South East Asia, where time zones align and airfares don’t frighten accountants too much. Kingsgate Consolidated’s Chatree mine in Thailand is finally stretching its legs. July brought its best month since a restart, with more than 8700 ounces of gold hauled out. The company also reaffirmed its guidance from last year for 80,000-90,00 ounces in the 2025 financial year, with an all-in sustaining cost (AISC) of US$1650 to US$1800 per ounce as the ramp continues.
Next door, Emerald Resources’ Okvau gold project in Cambodia has a steady 19,000 ounce-a-quarter output, a life-of-mine AISC line of just US$966/ounce, and FY26 guidance of 105,000-120,000 ounces as its underground mine comes into focus. One is squeezing down costs after a restart, the other is low-cost and growing. On a blended spreadsheet, that’s about 200,000-230,000 gold ounces a year for a regional operator with a meaningfully smooth cost curve and a shared skill set. Could a decent knees up at a local restaurant be in order for these neighbours?
One caveat worth flagging here: Kingsgate remains party to an investor-state arbitration under the Thailand/Australia Free Trade Agreement, which allows Australian investors to bring claims in international arbitration. The dispute stems from Thailand’s 2016 shutdown of the Chatree gold mine, and the parties have agreed to keep the arbitral award under a “holding period” until September 30. More than likely, both boards would want this hurdle cleared before looking at any new opportunity.
Then there’s West Africa, where the discount can be your friend until it suddenly isn’t. West African Resources poured first gold at the Kiaka mine ahead of schedule and under budget. Management keeps talking about a line-of-sight to 500,000 ounces per annum by 2030 with West African Resources’ Sanbrado gold operation and Kiaka humming together.
Perseus Mining remains the region’s grown-up in the room, printing 121,000 ounces in the June quarter and reiterating that its FY25 guide remains intact. In a calmer macro setting for Burkina - and yes, that’s a serious point to consider – a deal between Perseus and West African certainly isn’t crazy talk. You’d get procurement synergies, deep bench strength across maintenance and mine planning and better optionality on power across two hubs. Dollar Bill thinks geopolitics will set the clock here, but the industrial logic looks sound.
Casting an eye back to the domestic landscape, and while the geography isn’t trivial - separated by some 750 kilometres - the logic of a Capricorn Metals tie-up with Bellevue Gold seems to survive the distance on the map. Capricorn’s cash engine pairs neatly with Bellevue’s high-grade endgame and a lot of the value sits in procurement, financing and risk mix, not just haul roads. Despite the tyranny of distance, this is a deal that could still have the fat lady singing.
Capricorn’s Karlawinda gold project is a reliable, slightly boring cash engine we all secretly want to own. It just guided FY26 at about 115,000-125,000 ounces with an AISC of $1530-1630 per ounce, while progressing the Mt Gibson project’s growth optionality and quietly adding ground around it. Bellevue, by contrast, copped a messy ramp, raised equity to reset a hedge book that was painfully below spot and then launched a strategic review “to maximise value”, which is mergers and acquisitions-speak for “we’ll take your calls”.
Pair the disciplined capex and steady ounces from Capricorn with Bellevue’s high-grade endgame and you could argue the whole is sturdier than either part. A deeper analysis is certainly required here, with total cost reduction the key. But if there’s one thing this cycle will reward, it’s a portfolio that can deliver clean free cash over time.
Then there’s WA’s Leonora chessboard. Genesis Minerals has spent the past two years consolidating the district, hoovering up Dacian Gold and the Gwalia complex and telegraphing a “fill the mill” strategy. With Red 5 and Silver Lake Resources now combined in the region, the King of the Hills mines sitting like a red-painted beacon and haul roads getting a workout, adjacency math still rules the conversation: shorten the haul, fill the plant and raise your return on capital employed.
Finally, if you want a smaller bolt-on, perhaps keep one eye on Ora Banda Mining. It’s not a beauty contest winner every quarter, but what a recovery from where it was just a few years ago. Since Luke Creagh took his Northern Star-earned credentials to Ora Banda, the company has done a remarkable job of transitioning its prospects from “not with my money” to possible, then probable and now bona fide producer.
The company’s FY25 run rate lifted with June quarter production near 22,000 ounces. The resource base around Ora Banda’s historic Davyhurst gold mine just ticked up to 2.11 million ounces after updates at its Riverina and Sand King prospects, while guidance into FY26 suggests the operating rhythm is settling. That profile fits as a tuck-in for someone with spare milling or a hunger for feed in the northern Goldfields. The chatter at the club is that Ora Banda will keep popping up on “what if” slides until someone either moves or a few quarterlies disappoint.
Across all of this, Dollar Bill would suggest a few unglamorous truths remain. First, milling adjacency beats romance. If you can shorten a haul, fill a plant or rationalise two maintenance teams into one, it’s real synergy - not just a line in a banker’s model.
Second, hedge books matter far more than Twitter gives them credit for. Bellevue literally raised equity to pay down and restructure hedges that were roughly $1000/ounce under spot. But the near-term pain gave it the chance to sell more ounces into a record tape and reopen its option set, which included that strategic review.
Third, cost curves are the tiebreaker. Any asset with something close to US$1000 per produced ounce blended with a ramping up, even higher-AISC mine could smooth the consolidated number and the multiple that goes with it. This is why the Kingsgate-Emerald idea has more gravity than geography alone suggests.
The majors have also shown their hand. Northern Star Resources was the first to jump when it broke cover to take out De Grey Mining for $5 billion, and more recently, Gold Fields moved on Gold Road Resources to simplify the Gruyere JV. When the top of the food chain is paying up for durable, tier-one ounces, mid-tiers with partially filled mills and not-quite-there ramp-ups tend to look at each other a little differently.
Regis Resources keeps tugging at the sleeve, too. Its Tropicana joint venture is inherently inefficient for a mature, long-life system. Regis owns 30 per cent, AngloGold the other 70. Consolidating that ownership - whichever way it goes - would remove the JV discount, simplify the capex and scheduling, and allow one owner to optimise the underground runway without committee time. Admittedly, management has publicly swatted away talk of an imminent deal, but the industrial logic doesn’t vanish because IR says “move along”.
Pantoro Gold’s Norseman project is another, perhaps slightly left-field inclusion here. The company’s June quarter came in a touch over 25,000 ounces at the top end of guidance as a reboot beds down. With Silver Lake Resources and Red 5 now under one banner to the north and Genesis focused on wringing every ounce out of Leonora, the adjacency case for Pantoro’s Norseman project as a tuck-in is straightforward: haulage rationalisation, higher plant utilisation somewhere in the district and fewer duplicated teams.
On the other side of the country, a pragmatic New South Wales bolt-on lives at Alkane Resources’ Tomingley operation. Seventy-odd thousand ounces a year with clean balance-sheet habits is nobody’s headline, but in a bigger East Coast portfolio, it smooths cash flow, spreads risk and unlocks exploration optionality that a standalone rarely fully monetises. Yes, Alkane is still in the middle of its Mandalay Resources tie-up, having recently acquired the Costerfield producer in Victoria. But once the dust settles, Tomingley will either be a well-funded self-help story or an even better prospect for acquisition.
Now, to the obvious wet blanket: geopolitics and valuation. Burkina Faso headlines can steal your weekend at any time. Thailand remains stable but carries its own permitting cadence and politics. Tanzania is hard work, and the DRC is… well, it’s the DRC.
But the price of being early with scale is often cheaper than being late with perfection and the price of bullion is clearly encouraging consolidation. That doesn’t mean every CEO will push their luck, but it does mean more of them will at least open the spreadsheet.
There’s a bit to chew on here, but Dollar Bill thinks we’re in the middle innings of this cycle’s consolidation. It’s all too easy to get depressed at the price-to-earnings (PE) ratios of tier one gold mining assets capable of delivering boring dividends but not massive growth. But Dollar Bill can’t help but be drawn to thoughts of a few meaningful consolidations that lead to lower costs, big growth and renewed PE ratios.
The test, as always, will be who can convert logic on paper into free cash in the next quarter and beyond. For now, my ears are open, my phone is charged, my glass is half full, the waiter is standing by and Dollar Bill is trying his best not to look at the gold price ticker every five minutes.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
