Barrick Gold Corp. intends to keep debt in its crosshairs with a plan to cut at least $2 billion this year as the world’s largest producer of the metal seeks to shore up its balance sheet following three annual gold-price declines.
The miner reduced total debt by $3.1 billion last year to $10 billion through measures that included asset sales and cost cuts. In 2016, it may sell additional non-core assets and create new joint ventures and partnerships to help meet its new debt-reduction target, the Toronto-based company said Wednesday in a statement.
“In the medium term, we aim to reduce our debt to below $5 billion,” the company said in the statement. “Philosophically, our goal is to have no debt at all.”
Investors will likely be encouraged by the debt-reduction goal, as well as by progress the company has made reducing its costs, said Michael Siperco, an analyst with Macquarie Capital Markets, said Wednesday by phone from Toronto.
“Two billion seems to be in the right range. The question now is going to be how they do it. It will be interesting to see if equity is a part of that, especially after that run-up the stock has had so far year-to-date.”
Barrick is the third-best-performing stock on the Standard & Poor’s/TSX Composite Index this year, with a 59 percent gain. Last month it regained its status as Canada’s biggest gold miner by market value by surpassing Vancouver-based Goldcorp Inc.
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