Barrick CEO casts doubts on a Kinross deal given pricey climate

Kupol operation in Russia. Photo by Kinross Gold

Kinross Gold Corp.’s exit from Russia has raised prospects of the Canadian company becoming a takeover target — though acquisitive major Barrick Gold Corp. doesn’t seem too interested.

Barrick Chief Executive Officer Mark Bristow mused about takeover opportunities in a Wednesday interview, including whether the world’s No. 2 gold producer would be interested in all or part of Kinross. Shares of the fellow Toronto-based miner are trading near two-year lows after shedding its assets in the riskier countries of Russia and Ghana in the past month.

“We will definitely pursue things that we feel will meet our investment filters,” Bristow said. “On first glance, that’s not the case.”

Read more: Barrick builds stockpiles as war adds to inflationary pressures

To be sure, Barrick’s CEO sees little value in deals for bullion producers across the board after surging commodities pushed up industry share prices. That dims the appeal of would-be targets, even as companies chase growth and savings through deals as inflation picks up and after an industrywide shortfall in exploration and development spending.

Still, Bristow sympathized with Kinross’s situation. The company agreed to sell its Kupol mine and other Russian assets to a firm controlled by mining magnate Vladislav Sviblov for $680 million, keeping a pledge to exit Russia after the country’s invasion of Ukraine. 

“Kinross is in an unfortunate situation,” he said. “They’re desperately trying to keep themselves together.”

Kinross didn’t immediately provide comment.

Barrick, meanwhile, is in a strong position after strengthening its balance sheet and global asset base, and Bristow said it won’t “hang back on growth opportunities.” 

“The problem is there’s very little value left in the market right now,” he said. “High commodity prices float all boats.”

(By James Attwood)

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