Barrick rumored to sell gold mines in Australia, PNG
Barrick Gold (NYSE:ABX, TSX:ABX), the number one producer of the precious metal, is hoping to raise up to $1.1 billion through the sale of two mines in Australia and Papua New Guinea.
The Toronto-based firm is working with Credit Suisse and planned to supply information on the Cowal and Porgera mines to potential buyers by the end of February, according to BNN, quoting people with knowledge of the matter. Barrick co-president Kevin Dushinsky told analysts on Feb. 19 that the company has received "a number of unsolicited approaches on the two mines."
According to Barrick, the Cowal mine in New South Wales produced 296,000 ounces in 2014 at all-in sustaining costs of $787 per ounce. The deposit is estimated to hold 1.5 million ounces of proven and probable mineral reserves. The Porgera mine, located in the highlands of Papua New Guinea, is 95 percent owned by Barrick. Barrick's share of the combined open pit-underground operation was 493,000 ounces in 2014 at an all-in cost of $996 per ounce.
While it cannot be confirmed, the rumored sales makes sense, considering Barrick's publicized plans to cut its net debt by at least $3 billion this year. They would also build on Barrick's 2013 offloading of the Darlot, Granny Smith and Lawlers mines in Australia, also done to reduce its debt burden, to South Africa's Gold Fields (NYSE:GFI), and other Australian assets to Northern Star Resources (ASX:NST) in 2014.