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Barrick Gold Corp. has sold several Nevada properties for $720-million (U.S.) in a flurry of transactions that underline how the gold industry is reshaping itself to deal with falling prices for the precious metal.
Kinross Gold Corp. of Toronto is the major purchaser of the assets. It will pay Barrick $610-million for its Bald Mountain mine and for its half interest in the Round Mountain mine. Kinross already owns the other half of the Round Mountain property.
In addition, Waterton Precious Metals Fund II of Toronto will pay $110-million to Barrick for its Ruby Hill mine and for a 70-per-cent interest in the Spring Valley project.
The deals demonstrate the impact of falling gold prices. Over the past four years, the metal has tumbled from $1,900 an ounce to below $1,100 an ounce.
As prices have fallen, Barrick has struggled under the weight of $13-billion in debt, much of it accumulated at the peak of the commodity cycle. At the start of this year, the Toronto company vowed to cut its indebtedness by $3-billion in 2015 and put many non-core assets on the auction block.
Over the past few months, it sold assets in Australia, Papua New Guinea and Chile, and also peddled a stream of gold from a gold mine in the Dominican Republic. The sales announced Thursday bring the total cash it has raised this year to $3.2-billion and puts it on target to meet its aggressive target for debt reduction.
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