Barrick Randgold merger could lead to $5bn asset sales, BMO says

Barrick Randgold merger could lead to $5bn asset sales, BMO says-巴里克Randgold合并可能引起50亿美元的出售交易
Published on: October 24, 2018
Author: Editor

Barrick Gold’s merger with London-listed gold miner Randgold Resources could lead to $5bn worth of asset sales, from mines in Zambia to Tanzania, according to BMO Capital Markets.

The $6bn deal, which was announced last month, has fuelled speculation in the mining community about possible sales. BMO flagged a total of 13 mines that could be sold following the merger — accounting for 750,000 ounces of gold and 400m pounds of copper.

“It is almost certain that New Barrick will embark upon a new round of asset divestitures aimed at positioning the company as the lowest cost western-based gold producer, but not necessarily the largest,” BMO said.

Barrick Gold’s executive chairman John Thornton, a former Goldman Sachs banker, has said the company will sell any mines that are not so-called “tier one” assets, capable of producing 500,000 ounces of gold annually for at least 10 years.

The largest potential deal would be Barrick’s Lumwana copper mine in Zambia, which could sell for $1.26bn, BMO said. It could also look to sell its 50 per cent stake in Chilean copper mine Zaldivar, as well as majority stake in Tanzania-focused miner Acacia.

Other asset sales could include Randgold’s Tongon, Massawa and Morila assets, BMO said.

Shares of Randgold have risen 22 per cent since the merger was announced to trade at 6362p. The company’s chief executive Mark Bristow, a renowned mining operator, will become CEO of the combined group.

Mr Thornton has said the company will focus on five “tier one” mines in the combined group: Cortez, Goldstrike, Kibali, Loulo-Gounkoto, and Pueblo Viejo.

He has also flagged that two mines under construction, Goldrush and Turquoise Ridge in Nevada, have the potential to become tier one gold mines.

Source: FT.com

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