There has been an increasing interest in a group of six U.S. gold assets that miner Barrick Gold Corporation (USA)(NYSE:ABX) wants to sell. The management anticipates the deal to conclude before year end. This strong interest has been mainly from miners based in North America. Toronto-based Kinross Gold Corporation (USA)(NYSE:KGC) and Denver-based Newmont Mining Corp (NYSE:NEM) are prospective buyers of the assets.
As part of its program to reduce at least $3-billion debt this year, Barrick reported it would sell six U.S. gold mines and projects, which are Ruby Hill, Hilltop, Golden Sunlight assets, Bald Mountain, Round Mountain and Spring Valley. Barrick President Kelvin Dushnisky stated that they just started the sale and already the interest level is extremely high.
He added that they commenced the process as a combined package but they are open-minded. If there is some meaningful offer, the company may split the package and they will get better deal as a whole for that. Dushnisky declined to mention any value on the package, which analysts believe could result in anywhere between $500 million and $700 million.
No streaming deals
Barrick is interested to say yes to non-core sales and no to streaming deals. If completed before year end, the sale amount will allow company to meet, in fact surpass $3 billion of debt reduction target. It would happen following other financings and asset disposals, including a streaming deal on its Pueblo Viejo mine. The President revealed that the company is not contemplating more streaming deals that covers the forward sale of potential production at a mine for an initial payment.
Barrick Gold Corporation (USA)(NYSE:ABX) is open to offering noncore assets, and when it comes to Lumwana copper mine the company will wait for copper prices to recoup their recent losses. Other than Lumwana, other non-core assets of company include a 50% stake in Kalgoorlie mine and a stake in Acacia Mining Plc.
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