LONDON ( The Deal) -- South Africa's Gold Fields Ltd. ( GFI) will pay $300 million for stakes in three Western Australian gold mines owned by Barrick Gold ( ABX), increasing its exposure to Australian gold mines at a time when rivals are looking to reduce production in the country. Gold Fields said Thursday, Aug. 22, it will pay the equivalent of $1,137 per ounce of output from the three mines based on annual production of 452,000 ounces, and the equivalent of $115 per ounce for reserves of 2.6 million ounces. "We estimate that these mines can add (at the current spot gold price) about $70 million in NPAT net profit after tax implying that GFI is paying 4.2x PE," noted Citigroup analyst Johann Steyn. "Even though we commend management for making acquisitions towards the bottom end of the cycle, the poor fundamentals of the gold industry ... make this a situation of doing the best you can with a bad hand." Australian gold company valuations have tumbled over the past year, dragged lower by slumping gold prices that have prompted huge writedowns and a spate of asset sales and mine closures. Alacer Gold Corp. said on Aug. 13 that it will sell or shutter its two Australian gold mines. Days earlier, Australia's biggest gold producer, Newcrest Mining Ltd., booked A$6.23 billion in writedowns and said it wanted to offload its least profitable operations. Johannesburg-based Gold Fields will buy Barrick's stakes in the Granny Smith, Lawlers and Darlot Gold mines. It will merge the Lawlers operation with its nearby Agnew mins, raising output from the country to about 42% of total producte. The acquisitions will make Australia the biggest area of operations for Gold Fieldis, raising output from the country to about 42% of total production. That will place Australia ahead of Ghana, which will account for 34% of output following the deal. Gold Fields spun off most of its South African assets earlier this year. "This is an attractive, opportunistic, and conservatively financed acquisition," Gold Fields CEO Nick Holland said in a statement. "The acquired assets are located in a preferred jurisdiction that we know well and where we have significant operational and management experience and infrastructure to maximize the value of the acquired assets."