Barrick cuts: Gold miner selling energy asset
Weighed down by weak commodity prices and high costs, Barrick Gold Corp (NYSE:ABX) is exiting the Alberta oil business by selling Barrick Energy.
The world's largest gold producer announced the sale in a press release on Tuesday as part of a broader move to optimize the company's portfolio by letting go of non-core assets.
The energy subsidiary consists of several oil-weighted properties in Alberta.
The price tag on Barrick Energy is C$455 million and the Canadian gold producer will receive approximately C$405 million in cash.
The sale involves three buyers, with Venturion Oil putting in C$59 million, Whitecap Resources (TSE:WCP) C$174 million and Canadian Natural Resources (NYSE:CNQ) C$173 million. The transaction is expected to close by month's end.
By shedding its energy asset, Barrick stands to lose approximately $500 million in the second quarter – $90 million of which would be a goodwill charge.
In late June the gold miner announced an anticipated $5.5 billion write-down in Q2.
The company has also been cutting down by laying off well over one hundred workers in the past few months.
Barrick Gold was up 3.08% on Tuesday on the New York exchange, trading at $18.20, and has been on the rise since mid-July after hitting a 21-year low in June.
Creative Commons image by: Charlie O'Neill