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Barrick selling Lagunas Norte

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Barrick

TORONTO – Barrick Gold Corp. announced the company has reached an agreement to sell its 100% ownership in the Lagunas Norte Mine in Peru to Boroo Pte Ltd. for up to $81 million in cash and royalties, plus Boroo will assume Barrick’s closure liability for the mine.

The liability for Lagunas Norte is $226 million, backed by an existing $173 million bonding obligation, according to Barrick.

Barrick’s president and chief executive officer, Mark Bristow, said in the Feb. 16 announcement that the mine sale was in line with Barrick’s policy of selling non-core interests to focus on tier one assets. Barrick has already realized roughly $1.5 billion under that policy.

The mine has been on care and maintenance since 2019.

Toronto-based Barrick reported the Lagunas Norte sale arrangement consists of an up-front cash payment of $20 million, additional cash consideration of $10 million payable on the first anniversary of closing and $20 million payable on the second anniversary.

The deal also includes a 2% net smelter return royalty on gold and silver produced through the refractory sulfide ore project, which will terminate once 1 million ounces of gold has been produced, with Boroo having the option to purchase the royalty for a limited time after the closing for $16 million.

There also is a contingent payment of up to $15 million based on the average gold price per ounce for the two-year period immediately after the sale closes. The contingent payment, payable two years after closing, is $5 million if the gold price average is greater than $1,600 an ounce but less than $1,700, $10 million at a price of more than $1,700 but less than $1,800 and $15 million if the average gold price exceeds $1,800 per ounce.

Barrick stated that while it is selling Lagunas Norte, the company will keep a team in Peru to continue to develop its portfolio of exploration assets and to pursue opportunities to find and operate a world-class gold or copper mines in that country.

Boroo is a Singapore-based privately held investment holding company that mainly operates, develops and acquires gold properties worldwide. The company owns production-stage and development-stage assets in Central Asia. It was formerly known as OZD ASIA PTE Ltd.

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