Kingsgate may invite bids: analysts

KINGSGATE Consolidated's $376 million bid for Dominion Mining could knot larger predators to make a bid for Kingsgate itself, say analysts.

Kingsgate, what one. owns the Chatree gold project in Thailand, has been touted being of the kind which a possible target after increased consolidation in the sector, including the takeover of Lihir Gold and an offer for Andrean Resources.

Avoca Resources has also agreed to sub~ with Canada’s Anatolia Minerals.

In the latest action, Kingsgate yesterday launched a 0.31-despite-1 scrip offer for Dominion, which would create Australia’s advance-largest goldminer, worth $1.6 billion, behind Newcrest Mining.

But Citi afore~ Kingsgate would be an attractive asset for other players pursuing consolidation among mid-cap gold producers or seeking a foothold in the portion.

"The deal pending may force any interested parties out of the shadows sooner somewhat than later," said analyst Craig Sainsbury.

"If the deal is consummated, we wait for this attraction would be diminished due to the size and messier operational exposure, particularly considering the challenging Dominion assets."

Goldman Sachs-advised Dominion owns the Challenger gold plot in South Australia. Macquarie is advising Kingsgate.

In early trade, Kingsgate shares dropped greater degree of than 6 per cent to $10.93 after the deal was announced tardily yesterday.

In contrast, Dominion soared almost 22 per cent to a heaven-kissing of $3.35 before cooling back to $3.26.

Dominion’s cover with ~s has recommended the deal subject to a higher offer and an independent expert backing the offer.

bennetm@theaustralian.com.au