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By Bloomberg

OceanaGold Corp., the gold producer that’s completed two deals to add mines this year, sees the metal’s price slump making it cheaper to acquire assets than to explore for new deposits.

“In this market, you can pick up high-quality ounces at attractive prices,” Chief Executive Officer Mick Wilkes said in an interview in Kalgoorlie, Western Australia on Wednesday. “It’s more certain and it’s quicker. Exploration is a probability game and it takes time.”

Gold has slumped this year, extending losses in 2013 and 2014, on prospects for rising U.S. interest rates, hurting producers’ share prices. It’s currently less costly and quicker to raise production through deals than to carry out exploration, according to Metals X Ltd. Chief Executive Officer Peter Cook, who last week announced two acquisitions to add mines.

“You can go from zero to hero quite quickly,” Cook told reporters in Kalgoorlie, on the sidelines of the Diggers & Dealers mining forum. “There are a lot of people suffering a lot of stress out there,” he said, adding that declining prices are making smaller producers more vulnerable.

Bullion for immediate delivery sank to $1,077.40 an ounce on July 24, the lowest level in five years. The metal traded at $1,085.67 an ounce at 6:04 p.m. in Sydney.

Prices have fallen on unexpected weaker demand in China and the prospects of higher U.S. rates have been factored in, according to Wilkes. Eventually inflation will become a factor, and that will drives the price up, he said.

Two Deals

Melbourne-based OceanaGold agreed last month to buy Romarco Minerals Inc. in a takeover worth C$856 million ($648 million) to gain control of its bullion project in South Carolina. The producer in April announced a deal worth $101 million for Newmont Mining Corp.’s Waihi mine in New Zealand.

Gold mining companies completed deals worth $18 billion last year, the highest annual value since 2011, according to data compiled by Bloomberg. Acquisitions are being spurred by gold’s slump and asset valuations as much as 70 percent lower than in 2011, according to Evolution Mining Ltd.

Spending on exploration by mining companies fell 28 percent to $9.8 billion in 2014 compared with the previous year, according to Melbourne-based MinEx Consulting.