(Reuters) – Barrick Gold Corp, the world’s biggest gold producer, on Thursday said it has acquiesced to deal three of its high-cost gold mines in Australia to Gold areas Ltd for $300 million.
The sale is the newest move by Toronto-based Barrick to re-shape its portfolio and focus on smaller cost assets, as it hunts for to shore up its balance sheet in the face of lower metal charges and ballooning capital expenditure charges at its Pascua-Lama gold task high in the South American Andes.
Barrick, which recently dispatched a $8.7 billion write-down and slashed its bonus by 75%, has been injure by the fall in steel charges and weighed down by a balance sheet that carries snare liability of $11.6 billion, following its exorbitant Equinox takeover in 2011.
Barrick started to discover a sale of the Yilgarn South mines – Granny Smith, Lawlers and Darlot in Western Australia early this year. The mines accounted for 6% of Barrick’s gold yield in 2012, and less than 2% of the gold miner’s proven and probable reserves, as of December 31, 2012.
Barrick head boss Jamie Sokalsky, in a declaration said “The affirmation to divest Yilgarn South illustrates further advancement as we work to optimize the company’s portfolio,”
The deal, anticipated to close in early October, is subject to regulatory acceptances. Barrick said it designs to use the proceeds of the deal for general business reasons and debt repayment.
Analysts barracked the deal, but documented that the sale pegs the worth of the assets at $115 an ounce, much lower than the North American assembly mean of about $280 per ounce.
Scotiabank analyst Tanya Jakusconek, in a note to clients said “Although the cost received is smaller than we expected, we outlook the sale as necessary to help pay down Barrick’s high debt level,”
Shares in Barrick increased 3.1% at $19.63 in selling on the New York supply Exchange.
Gold Fields will have the choice to deliver up to 50% of the concern in its own common shares to Barrick in lieu of the matching allowance of money concern at closing, said the businesses in distinct declarations.
Following the acquisition, Gold Fields said Australia will be its biggest regional production center.
Barrick began to discover a sale of the mines after its attempt to sell its most stakes in African Barrick Gold to a Chinese buyer failed early in 2013, dashing wants of a promise $3 billion deal for the underperforming unit.