Barrick Poised to Sell More Gold Mines as It Whittles Down Debt – by Danielle Bochove and Scott Deveau (Bloomberg News – July 16, 2015)

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Barrick Gold Corp., nearing a deal for its Zaldivar copper mine, is likely to consider three other mines as leading candidates for sale as it works to cut the biggest debt in the gold industry.

Among the remaining non-core mining operations that Barrick would examine selling are its 50 percent stake in Australia’s Kalgoorlie mine, Canada’s Hemlo and Bald Mountain in Nevada, according to analysts and investment bankers.

The world’s largest producer of the metal has pledged to raise at least $3 billion this year to reduce its $12.9 billion debt. The Toronto-based company is in advanced discussions to sell a 50 percent stake in its Zaldivar mine in Chile with final bids submitted last week by China Molybdenum Co., BHP Billiton Ltd. and others, people familiar with the matter said last week.

While Barrick has said it only wants to sell a 50 percent stake in the mine, some of the bidders were expected to have submitted bids for the whole operation, which is valued at more than $2 billion, the people said.

If completed, Zaldivar would mark the last of three deals Barrick has pledged to complete this year. In May, the company sold a 50 percent stake in its Porgera mine in Papua New Guinea to Zijin Mining Group Co. for $298 million. That came two days after it agreed to sell its Australian Cowal mine to Evolution Mining Ltd. for $550 million.

‘Bedrock Principle’

Excluding Zaldivar, the company has made more than $2 billion in deals since its total debt peaked at $15.8 billion in 2013, the same year gold futures had their biggest annual plunge in more than three decades. The debt had ballooned after Barrick’s takeover of copper miner Equinox Minerals Ltd. in 2011.

Reducing debt will remain a priority after the Zaldivar sale, Andy Lloyd, a Barrick spokesman, said this week in an e-mail.

“Prudent financial management was a bedrock principle of the company and our current level of debt is inconsistent with that principle,” Lloyd said. “No priority is more important than restoring a strong balance sheet.”

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