African Barrick new CEO wants to split from Canadian parent
African Barrick’s (LON:ABG) new chief executive, Bradley Gordon, said Tuesday at the Denver Gold Forum he wanted his firm to be independent from its 74% parent company Barrick Gold (TSX, NYSE:ABX) within about a year.
In his first public appearance since taking over last month, Gordon said the operating review initiated by his predecessor could be implemented more rapidly and that it was “certainly the intention,” to split from the world’s No.1 bullion producer, reports FT.com (subs. required).
“We are still cash flow negative . . . first we need to turn the business round,” Gordon was quoted as saying. “My first impression is that we can go further and faster with the operational review . . . We need to protect that $321m in the bank balance.”
As most miners, African Barrick —Tanzania's largest gold company— has been struck by lower bullion prices, high costs and production delays resulting in three consecutive years of output decline, and a 73% value loss since it listed in London in 2010.
While Gordon acknowledged the company’s current price is more than weak, he added the separation would be a “staged, well-managed divestment strategy,” ideally to materialize over the next 12 to 18 months.
The mid-cap gold miner, which spun off from Barrick in 2010, currently employs about 5,600 workers and 3,500 contractors. It recently expanded into neighbouring Kenya to explore for gold.