Barrick to shut Utah office, dissolve copper unit, to cut costs

Fri Sep 18, 2015 10:43am EDT
 
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TORONTO, Sept 18 (Reuters) - Barrick Gold Corp will close its Salt Lake City, Utah office by the end of November and dissolve a standalone copper unit, as the world's biggest gold producer by output continues to cut costs to help pare its debt.

The Salt Lake City office has approximately 110 employees, down from 130 earlier this year, a Barrick spokesman said, and the majority of those workers will be laid off. Earlier this year, Barrick closed an office in Perth, Australia.

The standalone copper unit will be integrated into the company, saving overhead costs, and the bulk of its staff, of 10 to 12 employees, will be laid off as well.

Barrick did not have an estimate on savings from the two latest restructuring measures.

The company has cut jobs, sold assets, put other assets up for sale and cut it dividend as it works to slash debt by at least $3 billion this year amid slumping gold prices. Down some 40 percent over the past four years, gold was trading at $1,140 an ounce on Friday.

There is no need for a separate copper division, created after the 2011 acquisition of copper miner Equinox Minerals, as Barrick focuses on its gold assets and operates just one copper mine in Zambia, spokesman Andy Lloyd said.

In August, Barrick said it had reached 90 percent of its $3 billion debt reduction target, or $2.7 billion. At the end of June, its debt was $12.8 billion.

Toronto-based Barrick has said it plans to cut expenditure across the company by $2 billion by the end of 2016 and will reduce capital spending to between $1.6 billion and $1.9 billion in 2015, down 20 percent from 2014.

RBC Capital Markets analyst Stephen Walker cut his price target on Barrick stock to $8 from $10 on Friday, citing lower copper price forecasts.

Shares of the company were up modestly at C$9.03 on the Toronto Stock Exchange in morning trading on Friday. However, the stock is down some 30 percent in the year to date.

Barrick's asset sales could reduce its gold production to 4.7 million ounces in 2018 from 7.4 million ounces in 2012, Walker wrote in an investment note. (Reporting by Susan Taylor; Editing by Bernadette Baum)