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Barrick Said to Consider Sale of Three Australian Gold Mines

Updated on
Barrick CEO Jamie Sokalsky
Jamie Sokalsky, chief executive officer of Barrick Gold Corp. Photographer: Joshua Prezant/Bloomberg

April 19 (Bloomberg) -- Barrick Gold Corp., the biggest producer by sales, is working with Bank of America Corp. and UBS AG on a possible sale of three gold mines in Australia, according to two people with knowledge of the matter.

Barrick is studying the sale of the Darlot, Granny Smith and Lawlers mines in Western Australia, said the people, who asked not to be identified as the details are private. The mines, which comprise the Yilgarn South division, together produced 452,000 ounces of gold in 2012 at a cash cost of $768 an ounce, according to Barrick’s website. Celina Watt, a Barrick spokeswoman in Perth, declined to comment when contacted by phone.

Chief Executive Officer Jamie Sokalsky, who took over in June, began selling assets, cutting costs and halting projects before gold plunged the most in three decades on April 15 to $1,347.95 an ounce in London. The Toronto-based company plans to offload Barrick Energy Inc. and Kabanga, its 50 percent-owned nickel project, after ending talks in January to sell its 74 percent stake in African Barrick Gold Plc to China National Gold Group Corp.

Barrick said April 10 it was suspending construction on the Chilean side of the Pascua-Lama project after a court accepted an injunction filed by indigenous communities concerned about water supplies. The project straddles the border with Argentina, where construction activities weren’t affected, the company said at the time.

Barrick also is facing difficulties over its newest mine, Pueblo Viejo in the Dominican Republic, which started production in August. President Danilo Medina said Feb. 27 that the mining contract was unacceptable and must be revised.

Barrick rose 1.1 percent to C$18.65 at the close in Toronto. The shares have dropped 46 percent this year.

The possible sale of the Australian mines was reported by the West Australian newspaper earlier today.

To contact the reporter on this story: Brett Foley in Melbourne at bfoley8@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

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