Barrick Gold Corp. announced the company has reached an agreement to sell its 50 percent interest in the Kalgoorlie Consolidated Gold Mines in Australia to Saracen Mineral Holdings Ltd. for $750 million. Newmont Goldcorp Corp. holds the other half of the operations.
“The sale of our non-operating interest in KCGM represents the first step in our plan to realize in excess of $1.5 billion from the disposal of non-core assets by the end of next year,” said Barrick President and Chief Executive Officer Mark Bristow.
“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,” he said in the Nov. 18 announcement.
Barrick and Newmont also are joint venture partners in Nevada Gold Mines with Barrick as operator, holding 61.5 percent and Newmont, 38.5 percent; and in the Pueblo Viejo Mine in the Dominican Republic, with Barrick owning 60 percent and the operator, Newmont, 40 percent. Colorado-based Newmont Goldcorp stated that the company looks forward to a long and productive partnership with Saracen, and Newmont will remain the operator of KCGM’s Super Pit, an open pit and underground mine in the Golden Mile region of Western Australia.
“We congratulate Saracen on its agreement to purchase Barrick’s stake in KCGM, and we look forward to partnering with them to continue delivering value at this world-class asset, safely and efficiently,” said Newmont Goldcorp President and Chief Executive Officer Tom Palmer.
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He said KCGM and the Golden Mile offer ongoing growth opportunities in Australia, “which remains a core operating regional for Newmont.”
Newmont reported KCGM employs roughly 1,250 people, produced 636,000 ounces of gold last year and has produced 21 million gold ounces since starting in 1989.
Toronto-based Barrick stated that the transaction is expected to be completed in this fourth quarter with Saracen, which has two gold operations in the Kalgoorlie region.
The managing director of Saracen, Raleigh Finlayson, said in his company’s announcement that the acquisition was consistent with the company’s strategic objectives.
“We are proud to announce this acquisition, which we believe will be transformational for Saracen and our shareholders. The Super Pit is a Tier 1 Australian gold mine with an outstanding track record of stable, large scale gold production and cash generation over many decades,” he said.
Finlayson also stated that Saracen believes there is significant exploration and development potential at the Super Pit.
Bristow stated that Barrick was confident Saracen would be an excellent partner at KCGM, and he said proceeds of the sale to Saracen will be used to further strengthen Barrick’s balance sheet, invest in the company’s future and support a commitment to shareholders to deliver returns to shareholders.