Barrick taps Michael Klein as advisor on Zaldivar mine options-sources

Mon Apr 20, 2015 3:40pm EDT
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By Freya Berry and Euan Rocha

LONDON/TORONTO, April 20 (Reuters) - Barrick Gold Corp is being advised on options for its Zaldivar copper mine in Chile by the boutique firm of mining rainmaker Michael Klein, in a deal potentially worth around $2 billion, three sources familiar with the matter said on Monday.

Toronto-based Barrick has already contacted a limited group of buyers including some diversified Chinese miners and copper companies, the sources said, declining to be identified since the matter is private.

Options could include a full sale of the Zaldivar mine, but the sources said Barrick is more likely to retain a stake. The mine produced roughly 222 million pounds of copper in 2014 and has reserves of a further 5.56 billion pounds. The sources cautioned that no deal was certain at this time.

Barrick declined to comment on the matter. Michael Klein could not be reached for comment.

Barrick said in February that it was focused on gold mining and had no plans to boost its copper operations. The firm is selling mines in Papua New Guinea and Australia to help reduce net debt by at least $3 billion by the year-end.

Barrick had about $13 billion in debt at the end of 2014, much of it related to its 2011 purchase of Africa-focused copper miner Equinox for about C$7.3 billion, ($6 billion).

"They're a gold company that diversified into copper, and they need to reduce their debt," one of the sources said.

A second source said a joint venture was the most likely path for the asset.   Continued...