September 21, 2015 / 12:52 AM / in 2 years

Barrick says strong interest in U.S. gold asset sale

(Reuters) - There has been strong interest in a package of six U.S. gold assets that Barrick Gold Corp ABX.TO wants to sell, a senior Barrick executive said on Sunday, adding that he expects a deal to close before year end.

Barrick Gold Corp Chairman of the board John Thornton (L), Co-President Kelvin Dushnisky (C), and Co-President Jim Gowans (R) get up after their annual general meeting for shareholders in Toronto, April 28, 2015. REUTERS/Mark Blinch

The interest has been largely from North American-based miners, Barrick President Kelvin Dushnisky said.

Denver-based Newmont Mining Corp (NEM.N) and Toronto-based Kinross Gold Corp (K.TO) are likely buyers of the assets, an investment banking source said, speaking on condition of anonymity. Kinross declined to comment and Newmonth could not immediately be reached for comment.

As part of its plan to cut at least $3 billion in debt this year, Barrick, the world’s biggest gold producer, last month said it would sell six of its U.S. gold mines and projects: Bald Mountain, Round Mountain, Spring Valley, Ruby Hill, Hilltop and Golden Sunlight assets.

“We just started it (the sale) but already the level of interest is extremely high,” Dushnisky told Reuters in an interview at the Denver Gold Forum, an annual gold industry conference.

“We initiated the process as a package but we are open-minded. If it makes sense to split it up and we will get better value as a whole for that, we will certainly consider it,” he said.

Dushnisky declined to put a value on the asset package, which analysts have said could bring in between $500 million and $700 million.

NO TO MORE STREAMING DEALS, YES TO NON-CORE SALES

If done before year end, the sales will enable Barrick to exceed its $3 billion debt reduction target following other asset disposals and financings, including a recent so-called “streaming” deal on its Pueblo Viejo mine in the Dominican Republic.

Dushnisky said Barrick was not contemplating any more streaming deals, transactions that involve the forward sale of future production at a mine for an upfront payment.

Barrick is open to selling more noncore assets although, when it comes to its Lumwana copper mine in Zambia, it may make more sense to wait for better copper prices, Dushnisky said.

Other than Lumwana, Barrick’s other non-core assets include a stake in Acacia Mining Plc (ACAA.L) and a 50 percent stake in the Kalgoorlie mine in Australia, which it owns with Newmont.

“While they are valuable assets ... if we can generate more value for our shareholders by those assets being in another company, then we are open-minded to that,” Dushnisky said.

He said Barrick is pleased with Acacia’s turnaround but there is still room for improvement.

Editing by Jonathan Oatis

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