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African Barrick seeks new name after partially splitting from Canadian parent

African Barrick seeks new name after partially splitting from Canadian parent

African Barrick is said to be aiming for more autonomy from its Canadian parent, which may include a name change.

African Barrick (LON:ABG) is reportedly mulling a name change after the company achieved a partial separation from parent firm Barrick Gold (TSX, NYSE:ABX) last week.

According to Mineweb, a recent report from analyst Cailey Barker suggests the African arm of Barrick is aiming for even more autonomy from its Canadian parent and may be “seeking to change its name to emphasise this prospective change in status.”

The Toronto-based gold giant, however, still holds a 64% stake in Tanzania’s largest bullion producer, whose CEO Bradley Gordon has been quite vocal about wanting complete autonomy from its Canadian parent since becoming the leader of African Barrick in September last year.

Barrick tried to sell part or all of its interest in African Barrick to China National Gold Group in 2012, but the deal fell through in 2013.

Since early this year the London-listed firm’s share price has jumped 65%, compared to a mere 11% increase for Barrick Gold, which according to Charles Gibson, analyst at Edison Investment Research, dents hopes of a bid for the business.

“Barrick’s sale seems to place a cap on the price of African,” Gibson was quoted by The Guardian as saying. “Whether this is in reality or investors’ minds doesn’t much matter. Absenting a significant move in the gold price, management’s options seem fairly limited. They can either exceed their cost saving targets, develop a new project or engage in some corporate activity to add value,” he added.

As most miners, African Barrick was severely hit by last year’s low 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.

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.