Barrick Gold selling, shopping & negotiating huge retrofit
The world’s second-largest gold producer plans to sell about $1.5bn in assets, while looking for gold projects, and investing in copper assets
Toronto/Hong Kong — Eight months into his job, Barrick Gold CEO Mark Bristow is shopping, selling and negotiating his way through a complex portfolio of assets in a massive retrofit of the global miner.
The CEO of the world’s second-largest gold producer is pushing ahead with plans to sell about $1.5bn in assets by the end of next year, while looking to buy more top-tier gold projects, in Canada and elsewhere, and invest in copper assets.
After reporting positive second-quarter earnings, Bristow also flagged the possibility that Newmont Goldcorp, its partner in the Kalgoorlie open-pit gold mine, may be swayed to join Barrick in selling the entire Australian asset.
“Kalgoorlie Consolidated Gold Mines (KCGM) is for sale, straight up, we put the sign out,” Bristow said of its 50% stake in Kalgoorlie after Barrick released its second-quarter earnings statement. “Gary said to me, depending on the price he’ll sell it, buy it or partner it,” Bristow said, referring to Newmont CEO Gary Goldberg.
“We would consider transactions to consolidate or divest our interest in KCGM under the right valuation terms,” Omar Jabara, a spokesperson for Newmont, said by e-mail. ‘Beyond that, we are not able to speculate.”
Goldberg has said he’d be interested in buying Barrick’s half of Kalgoorlie at the right price. During Monday’s interview, Bristow said Northern Star Resources is “one of the front-runners” among companies that have expressed interest in Barrick’s stake.
“We’ve got no shortage of interest in that asset — it’s an icon in the gold industry,” Bristow said in an interview on Monday, referring to Kalgoorlie. Barrick has engaged with Goldberg and “he needs to decide”, Bristow said.
Barrick shares climbed as much as 2.9% in New York trading on Monday after reporting that second-quarter revenue climbed 21% and costs this year will be at the lower end of forecasts. The company’s shares later closed 0.9% lower, trimming this year’s gain to 33%, still almost double the pace of bullion.
Among countries targeted for deals, Barrick is keen to buy more mines in Canada and is actively looking for opportunities. “We’re under-invested in Canada: watch this space,” he said. “We don’t want to buy companies; we’re after assets.”