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(Adds information on M & A transactions in the industry, commented on UBS note)
Feb. 25 (Reuters) – Australian gold mining company Evolution Mining Ltd. announced on Monday it has acquired a 19.9 percent stake in the smaller Tribune Resources Ltd at a price of AUD 41.3 million.
According to Evolution, Tribune's main badet was its interest in the East Kundana mining business in Western Australia, a joint venture of Northern Star Resources Ltd, Rand Mining Ltd and Tribune.
Gold producers have begun negotiations to increase their reserves down as bullion prices rise.
Earlier this year, Newmont Mining announced a $ 10 billion takeover of Goldcorp Inc., following Barrick Gold's acquisition of Randgold Resources.
Bankers and badysts believe that gold producers who have good badets but stagnant growth are looking to partner with well-managed companies.
Barrick announced on Friday that it plans to buy back the shares of its American competitor Newmont Mining Corp., a potential deal that would create a monolith in the global gold sector and likely push smaller companies to buy each other.
Barrick, already the largest gold miner in the world, said its proposed proposal offered no bonus to Newmont's shareholders and no decision had yet been made.
According to UBS badysts, the divestment goals announced by the Newmont-Goldcorp grouping and the new Barrick-Randgold grouping offer "a significant opportunity" for ASX-listed companies to acquire badets .
"Australian gold producers have stronger balance sheets than their North American counterparts. We believe that Evolution & Northern Star are best positioned to make profitable acquisitions given their strong track record in this area, "said UBS in a note last month.
The Evolution action lost up to 2.4% in morning trading, while Tribune shares rose 3.4%. (1 Australian dollar = 1.3974 Australian dollar) (Report by Aby Jose Koilparambil in Bengaluru, additional report by Melanie Burton in MELBOURNE, edited by Shreejay Sinha)
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