VANCOUVER/TORONTO May 26 (Reuters) - Barrick Gold Corp's first step to long-promised partnerships with China, as well as progress in reaching an ambitious debt-cutting goal, are turning skeptical investors warmer toward the world's biggest gold miner.
Barrick said on Tuesday it would sell a stake in its Porgera mine in Papua New Guinea mine to China's Zijin Mining Group , and form a strategic partnership with Zijin. The moves marked an initial push in Executive Chairman John Thornton's plan to forge closer ties with China, the world's biggest producer and consumer of gold.
The former Goldman Sachs executive's radical overhaul since taking Barrick's reins a year ago, including eliminating the position of chief executive, had raised eyebrows among investors. Many also complained about his outsized signing bonus, lack of access, and most recently his 36 percent pay rise.
But a clearer strategy unveiled in February to slash Toronto-based Barrick's mountain of debt, while seeking close links with China, looks to be winning approval.
"They've set out a plan and we're seeing them execute on it," said Joseph Foster, portfolio manager at Van Eck, Barrick's biggest shareholder.
"The biggest nut to crack is the debt burden, and they are whittling away at it. It is all a positive direction."
Barrick's stock is up 21 percent this year, outperforming the S&P/TSX Global Gold index, which has risen 14 percent. On Tuesday, it fell 4 percent to C$14.51, in line with other gold stocks as bullion slid.
Barrick's latest deal brings its recent asset sale proceeds plus cash close to $1 billion, a third of the way to its debt-reduction target of at least $3 billion this year.
With a 50 percent stake in its Zaldivar copper mine in Chile expected to sell for around $1 billion, plus other possible sales, including its stake in African-based Acacia Mining , Barrick appears on track to meet its target.
While details on the Zijin deal were few, the market was quick to speculate that Barrick's large, high-grade Nevada discovery, Goldrush, and its massive, stalled Chile-Argentina project, Pascua-Lama, could be contenders for joint development.
The Zijin agreement is not expected to exclude other potential partners. Last year Barrick held talks several times with China's sole state-owned gold miner, China National Gold.
"It seems to me like Barrick is open to doing deals now with anyone that can help enhance value," said Chris Mancini, an analyst at Gabelli Gold Fund, which owns Barrick shares. (Editing by Jeffrey Hodgson; and Peter Galloway)