Gold rush fever has returned to Ballarat, a small country town in the southern Australian state of Victoria, after the AIM-listed miner Ballarat Goldfields entered talks with an unnamed bidder.
The Canadian giant Barrick Gold, the largest gold miner in the world, was considered likely to be behind the offer with the smaller Australian rival Consolidated Minerals also deemed a potential merger partner.
Although Ballarat Goldfields' shares were suspended in Australia, the stock continued to trade on AIM. Its shares closed more than 13 per cent higher at 10.5p giving it a market capitalisation of more than £120m.
Numis Securities' analyst John Meyer said Barrick could be a likely bidder as Ballarat's "Blue Whale" fault has drilling potential for up to 6m ounces of gold, according to the company.
Gold was first discovered in the Victorian town of Ballarat in 1851. The subsequent gold rush resulted in the settlement booming and in 1858, the "Welcome Nugget" - which contained 68,272 grams of pure gold - was discovered.
At its peak in 1868, 300 companies mined the gold field and in December 1854, the town witnessed Australia's most famous insurrection - the "Eureka Stockade" - when 28 miners were killed after clashes with the authorities.
The last commercial gold mine closed in 1918 and the town has served as a tourist attraction since.Reuse content