Barrick walks away from venture with gold Russian explorer
Russia-focused gold producer Highland Gold Mining Ltd. (LON:HGM) shares were falling dramatically this morning after the company announced that Canadian Barrick Gold Corp. (TSE:ABX) would sell its 20.4 per cent stake in the company, as it no longer considered the investment as core to its business operations and strategy.
The company’s shares dropped as much as 9.5 percent to their lowest since last June, due mainly to investors’ fears over the loss of a major strategic partner, like Barrick.
The Canadian miner had bought the stake in Highland almost a decade ago with the purpose of using it as a way to tap into the Russia, which has the world’s second-largest gold reserves after South Africa.
Highland, however, failed to increase its production, pushing Barrick to focus on other easier and more profitable markets, such as the U.S. and Latin American.
According to Highland, the Toronto-based gold company remains supportive of Highland’s board and management as they continue to execute on Highland’s growth objectives.