Barrick Gold sells half of Kalgoorlie Consolidated Gold Mines for $750 million

KCGM’s Super Pit, which is expected to run out of ore by 2029, unless underground mining continues after that. (Image: Chris Fithall | Flickr Commons)

Canada’s Barrick Gold (TSX:ABX)(NYSE:GOLD), the world’s second largest producer of the yellow metal, reached an agreement to sell its 50% interest in Kalgoorlie Consolidated Gold Mines in Western Australia to Saracen Mineral Holdings (ASX:SAR).

Saracen already holds two gold operations in the Kalgoorlie region, namely, the Carosue Dam and the Thunderbox mine sites.

In a media statement, Barrick said the KCGM transaction involved the payment of $750 million in cash and that such funds will be used to further strengthen the company’s balance sheet, invest in future projects and deliver returns to its shareholders.

“The sale of our non-operating interest in KCGM represents the first step in our plan to realize in excess of $1.5 billion from the disposal of non-core assets by the end of next year. While this iconic gold mine has been a valuable contributor to Barrick over the years, the asset does not fit with our strategy of operating mines that we own,” Mark Bristow, Barrick’s president and CEO, said in the press brief. “The sale allows us to further focus our portfolio on core operations.” 

Bristow said Barrick was pleased to have achieved a successful outcome following a competitive sale process and was confident that Saracen would be an excellent partner for Newmont Goldcorp at KCGM going forward. 

The KCGM Operations include the Fimiston open pit, also known as the Super Pit, the Mt Charlotte underground mine and the Fimiston and Gidji processing plants, all located adjacent to the City of Kalgoorlie-Boulder approximately 600 kilometres east of Perth. KCGM produces around 700,000 ounces of gold each year and has a gold reserve of 6.9 million ounces.

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