[miningmx.com] – BARRICK Gold Corp. said it had withdrawn from discussions over the sale of its subsidiary, African Barrick Gold, to China National Gold, talks that first kicked off in August.
“Barrick Gold Corporation today reported that it is no longer in discussions with China National Gold regarding its holding in African Barrick Gold,” the Canadian firm said in an announcement.
“These discussions were part of our ongoing efforts to identify opportunities to optimise our portfolio, however we are approaching this in a prudent and disciplined manner and will only proceed with opportunities that generate acceptable value for Barrick,” said Jamie Sokalsky, president and CEO of Barrick Gold.
“African Barrick Gold’s assets hold significant potential, and we will continue to look for ways to best realise that value for our shareholders,” he said.
It was speculated last year that Barrick Gold would sell its 73.9% stake in African Barrick for $2.5bn (£1.55bn). African Barrick is currently capitalised at £1.8bn on the London Stock Exchange.
Shares in African Barrick have disappointed, falling about 30% since it was spun out of Barrick Gold Corp in 2010. It operates four gold mines in Tanzania and produces about 700,000 ounces a year of gold. It has 31 million oz in reserves.
The Financial Times reported on August 15 that Barrick Gold Corp. was speaking to Chinese copper and gold company Zijin and had retained UBS to consider its options.
The sale of African Barrick is one of several corporate reshufflings in the North American gold sector in which Kinross Gold has also explored the possibility of hiving off assets.
“As noted in Barrick’s 2012 second-quarter report, Barrick has adopted a renewed focus on maximising shareholder value through a disciplined capital allocation programme, which includes optimising Barrick’s portfolio of assets and maximising returns on investment and free cash flow,” Barrick Gold Corp said in a statement at the time.
Sokalsky had pledged that “returns will drive production; production will not drive returns’ as he unveiled a review of the miner’s sprawling portfolio of assets.
