TORONTO — Shares in Barrick Gold Corp. rose on Monday after the company announced plans to sell its 50 per cent non-operating interest in an Australian gold mine for US$750 million in cash.
The deal to sell its stake in Kalgoorlie Consolidated Gold Mines in Western Australia — which includes the country’s largest open pit gold mine, The Super Pit, as well as underground and processing works — to Australian gold miner Saracen Mineral Holdings Ltd. was announced on Sunday.
Barrick CEO Mark Bristow says the sale takes the Toronto-based miner to the halfway point of its goal to sell $1.5 billion in non-core assets by the end of next year to sharpen focus on mines that it both owns and operates.
Analysts were split on the price reached after a competitive process, with BMO’s Andrew Kaip noting it beat his estimate of US$614 million and National Bank of Canada’s Mike Parkin pointing out he had modelled US$864 million.
Newmont Goldcorp Corp., the operator and owner of the other half of the mine, welcomed its new partner.
It said the mine, which has produced about 21 million ounces of gold over the past three decades, will continue to operate as usual. It employs about 1,250 people and produced 636,000 ounces of gold in 2018.
“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,” Bristow said in a news release.
Barrick’s shares were up 49 cents or 2.2 per cent at $22.40 in late morning trading on the Toronto Stock Exchange.