Barrick Gold eyes sale of key Chilean copper mine – by James Wilson (Financial Times – March 15, 2015)

Barrick Gold is eyeing the sale of one of its “crown jewels”, a Chilean copper mine, as the Canadian miner tries to meet an ambitious debt reduction target to help restore its lustre for investors.

Bankers and mining executives said the Chilean copper mine, one of Barrick’s key assets, would be of potential interest to a number of private equity vehicles, including Mick Davis’s X2 Resources. Mr Davis, one of the best-known mining executives, headed Xstrata before its 2012 sale to Glencore. X2 has raised $5.6bn and is hunting for mining deals.

A sale of the Zaldívar mine by Barrick, which mines more gold annually than any other company, could be expected to realise more than $1.5bn. It would be one of the most eye-catching mine sales since the sector’s sharp downturn, showing how companies that are under fire are having to respond to falling commodity prices and protect balance sheets by selling choice assets.

While X2 would be interested in Zaldívar, other interest could come from Chinese groups looking to acquire resources, one banker said. China’s Minmetals bought Las Bambas, a former Xstrata project that is one of the largest copper mines under construction, last year.

Teck, the Canadian mining group, is also on the hunt for copper assets, its chief executive said this month. X2 declined to comment.

Barrick has lost its crown as the world’s most valuable gold miner by market capitalisation following several years of poor results and write-offs on expensive acquisitions. Its stock market capitalisation has sunk to about $12bn and net debt is about $10bn.

Barrick has not said it would definitely sell Zaldívar but the miner would find a substantial offer difficult to resist for what has become a non-core commodity. Some of Barrick’s investors have also urged a divestment of the mine.

Barrick could also try to keep a minority stake, said one person familiar with the company.

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