Barrick in talks on further asset sales, no spin-offs
By Allison Martell
DENVER (Reuters) - Barrick Gold Corp (ABX.TO: Quote), whose shares have been beaten down in recent months by a series of writedowns and project delays, is in talks on further asset sales, with the focus on divesting smaller, higher-cost mines, Chief Executive Jamie Sokalsky told Reuters on Tuesday.
Barrick announced a deal last month to sell three of its high-cost mines in Australia for $300 million. The world's largest gold producer is looking to improve returns in the face of weaker metal prices and ballooning costs.
Sokalsky said Barrick could sell more mines, especially those that are relatively high cost, have shorter mine lives and limited opportunity to expand. Some of Barrick's remaining assets in Australia fit that profile, he said.
"There's quite a level of interest, even though as I've said it's a buyer's market," Sokalsky said, speaking on the sidelines of the Denver Gold Forum in Colorado. "We're getting unsolicited inquiries from quite a number of parties."
Barrick owns 24 mines around the world and plans to produce more than 7 million ounces of gold this year. By selling non-core assets, management can focus on richer, long-term projects, like the Cortez mine in Nevada, Sokalsky said.
"This isn't about going from 24 to five or six, but it is an optimal point somewhere in between, I think," he said.
Barrick also sold its energy businesses for about C$455 million ($441.77 million) earlier this year.
Gold prices have fallen more than 20 percent so far this year, putting pressure on miners to clean up balance sheets and cut costs to improve profit margins. Continued...