Goldsmith gets back into gold: Bendigo Mining will raise money to reopen old Australian field

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SIR James Goldsmith is joining with the entrepreneur Kerry Packer to buy a stake in a speculative Australian gold mining project. The move comes only months after Sir James's celebrated decision to sell his shares in Newmont Mining, America's biggest gold producer.

With Mr Packer's Consolidated Press Holdings, Sir James is taking a stake in Bendigo Mining, which owns the rights to one of Australia's oldest gold mines.

Bendigo is placing 20 million new shares - about 14 per cent of the enlarged company. About 75 per cent of them are to be taken up in equal shares by Sir James and Mr Packer, with the remainder going to institutions.

The placing is at 50 Australian cents a share, significantly below the last closing price of 66 cents, but well up on the year's low for the stock of 4.5 cents.

The aim is to raise dollars 10m to develop the mine, which has the rights to the old Bendigo field in Victoria, historically Australia's second most productive field.

After the field's discovery in the mid- 19th century more than 22 million ounces of gold was produced from alluvial and hard rock mining.

In late 1989, Western Mining won approval for a Adollars 20m, 150,000 tonnes-per- year underground gold mining project on the Deborah Reef in Victoria. Underground exploration in the area has found 800,000 tonnes of ore reserve.

In October last year the project was sold by Western Mining to Bendigo Mining for Adollars 1.6m. The purchase price included a royalty agreement.

Analysts said that Sir James may have wanted a more highly geared exposure to gold than with Newmont shares.

Mike Coulson, an analyst with the broker Credit Lyonnais Laing, said: 'Many of these old mines were originally operated very inefficiently - they only went after the obvious gold . . . that's why there is a saying in Australia that the most certain place to find gold is in an old gold mine.'