Canada’s Barrick Gold (NYSE:ABX)(TSX:ABX) has began the process of selling a stake in its Zaldivar copper mine in Chile to focus on its core operations and meet an ambitious debt reduction target of $3 billion by the end of the year.
The news, part of Barrick’s first quarter results announcement, follows similar steps taken by the gold giant to inject cash flow into its weak coffers. The Toronto-based miner has already put its Australian and Papua New Guinea mines up for sale and the sale of Zaldivar, located next to the world’s largest copper mine Escondida, could raise at least $1.5 billion, according to market estimates.
Despite this major step away from copper, Barrick also said it was teaming up with privately-held Quantum Pacific Exploration to explore for new deposits of the red metal in northern Chile.
There are several potential buyers out there, as Chinese companies, private equity firms including Mick Davis’s X2 Resources, and even Teck Resources (TSX:TCK.A, TCK.B), (NYSE: TCK) are all said to be on the hunt for copper assets.
The miner unveiled a “significant” new gold discovery, known as Alturas, on Chile’s prolific El Indio belt, close to the polemic Pascua-Lama project. Drilling to date suggests the deposit is geologically similar to Veladero, with the potential to be significantly higher grade, Barrick said.
The company also said it earned $57 million or 5 cents per share, compared with $88 million or 8 cents a year earlier. The weak figure will probably weigh on today’s shareholders annual meeting, which is expected to see at least three Canadian pension funds and proxy advisory firms vote against the board’s decision to award chairman John Thornton with a 36% pay raise.
Image courtesy of Barrick Gold.