Barrick IPO proposal puts Nevada Gold Mines in M&A spotlight

Barrick Mining Corp.’s proposal to hive off its US assets from its sprawling portfolio in riskier countries will pique the interest of rival miners, according to analysts.

A separate company housing Barrick’s joint-venture interests and the Fourmile discovery in the state of Nevada, as well as a mine in the Dominican Republic, would be attractive to Newmont Corp. and Agnico Eagle Mines Ltd., Jefferies analysts wrote Monday.

“It’s an easier acquisition to execute versus current Barrick because it’s smaller and doesn’t require divesting non-core assets in challenging jurisdictions,” a group of Jefferies analysts including Fahad Tariq wrote.

Agnico and Newmont declined to comment.

Barrick’s plan to explore an initial public offering for its North American gold assets follows a Bloomberg report in October that Newmont had studied a deal to gain control of the mines the companies share in Nevada, which have benefited from recent investments.

The new vehicle is “likely to become an acquisition target for Newmont,” National Bank Financial analyst Shane Nagle wrote in a note to clients.

Still, Barrick probably will focus on additional drilling at Fourmile to increase the resource before considering a sale, which would have to garner a significant premium, the Jefferies analysts wrote.

(By James Attwood)