No Fire Sale, But Barrick Near Deals on U.S. Assets: President

  • Barrick president expects to announce U.S. asset sale in Q4
  • Gold miner would consider superpit sale for ``full value''

Barrick Gold Corp., the world’s largest producer of the metal, is close to selling a package of U.S. assets, and expects to announce a deal this quarter.

“If we get the price that we think represents full value then that’s the objective but otherwise, no distress sales,” Barrick President Kelvin Dushnisky said in a telephone interview after the company’s third-quarter earnings call. The Toronto-based company has moved to the second stage of the sales process and continues to see high interest for the mines, he said.

Barrick announced plans in August to sell six non-core assets in Nevada and Montana. Since then, rival Newmont Mining Corp.’s Chief Executive Officer Gary Goldberg has said he would be interested in buying out Barrick’s 50 percent stake at Kalgoorlie in Australia, which was not among those that were for sale. On Thursday, Dushnisky made it clear he would be willing to sell that as well -- as long as the price is right.

“If we received full value for the 50 percent we would certainly consider it,” Dushnisky said. “It’s a great asset.” He declined to say what Barrick believes the super pit is worth.

Barrick reported third-quarter earnings that beat analysts’ estimates as lower costs and higher production helped to mitigate the impact of weak metals prices. Earnings excluding one-time items were 11 cents a share. That topped the 7-cent average of 21 estimates compiled by Bloomberg. Sales declined 12 percent to $2.32 billion, beating the $2.31 billion average estimate.

The company will continue to focus on reducing operating costs in 2016, with the goal of growing free cash flow, Dushnisky said. Barrick is close to meeting its $3 billion debt-reduction target, having been aggressively selling assets and cutting costs. In July, the company sold a half-stake in its Zaldivar copper mine in Chile to Antofagasta Plc for $1.01 billion, and said Wednesday that proceeds will be used to pay down debt. Earlier it sold a 50 percent stake in its Porgera mine in Papua New Guinea to Zijin Mining Group Ltd. Those asset sales will help bring total debt repayment to $2.9 billion and the remaining $100 million will be paid out of free cash flow.

Although he doesn’t expect any new joint ventures to be announced before the end of this year, Dushnisky said he would welcome more deals with Barrick’s new partners at Porgera and Zaldivar.

“If it makes sense for both of us, we’d want to consider both Zijin and Antofagasta as preferred partners,” he said.

Shares of Barrick rose 1.6 percent to C$10.31 in Toronto.

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