Barrick Gold Corp. has entered into agreements to sell a number of non-core assets in Nevada for $720 million in cash, including 100 percent of the Bald Mountain mine, 100 percent of the Ruby Hill mine, Barrick’s 50 percent interest in the Round Mountain mine and the company’s 70 percent interest in the Spring Valley project.
Including these transactions, Barrick has announced asset sales, joint ventures and partnerships worth $3.2 billion since the start of 2015. The company is on track to meet its stated debt reduction target of $3 billion for 2015, which, when completed, will represent a 23 percent reduction in total debt since the start of the year.
“The sale of these assets is consistent with our strategy to create long-term value for our shareholders by strengthening the balance sheet and further focusing our portfolio on core mines that will drive free cash flow growth,” said Barrick President Kelvin Dushnisky in a press release. “As we move into 2016 and beyond, we will continue to take steps to strengthen our balance sheet, but we will balance debt repayments with investments to drive future growth in free cash flow and EBITDA.”
Barrick also has reached an agreement to sell the company’s 50 percent interest in the Round Mountain mine and 100 percent of the Bald Mountain mine to Kinross Gold Corp. Barrick and Kinross have also agreed to form an exploration joint venture that will own a large land package on the Bald Mountain property. Each company will own 50 percent of the joint venture and will fund exploration activities and advance new mine development opportunities on a 50-50 basis, with Kinross acting as the operator. The consideration for these assets is $610 million in cash.
Barrick has also reached an agreement to sell the company’s 70 percent interest in the Spring Valley project and Barrick’s 100 percent interest in the Ruby Hill mine to subsidiaries of Waterton Precious Metals Fund II Cayman, LP for $110 million in cash.
Both transactions are subject to customary closing conditions. The transaction with Waterton is expected to be completed by the end of 2015. The transaction with Kinross is expected to be completed by mid-January 2016.
CIBC World Markets Inc. is acting as financial advisor to Barrick. Parsons Behle & Latimer and Davies Ward Phillips & Vineberg LLP are acting as legal counsel to Barrick.