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Barrick Gold Corp. (ABX.TO), the biggest producer of the precious metal by sales, is working with Credit Suisse Group AG on the possible sale of gold mines in Australia and Papua New Guinea, people with knowledge of the matter said.
The Toronto-based company plans to send preliminary information on the Cowal and Porgera mines to potential buyers by the end of the month, one of the people said, asking not to be identified as the details are private. Barrick could raise as much as $1.1 billion US from selling the assets, TD Securities said earlier this month.
The gold producer said last week it plans to reduce net debt by at least $3 billion this year, partly by selling the two mines and cutting staff members at its head office. The company, which started with a stake in an Ontario mine in 1983, now operates across five continents, according to its website.
The Cowal mine in Australia’s New South Wales state produced 269,000 ounces of gold in 2014 at an average cost of $787 an ounce, according to Barrick’s website. The Canadian company also owns 95 percent of the Porgera operation in Papua New Guinea, which produced 493,000 ounces last year for Barrick, according to the website.
The Canadian company has received “a number” of unsolicited approaches on the two mines, co-president Kelvin Dushnisky told analysts Feb. 19. Evolution Mining Ltd. is reviewing acquisition opportunities as major commodity producers weigh asset sales in the region, Jake Klein, chairman of the Sydney-based gold producer, said on a Feb. 18 conference call without naming targets.
Barrick could also consider selling its 64 percent holding in Acacia Mining Plc, formerly known as African Barrick Gold Plc, TD Securities analyst Greg Barnes wrote in a Feb. 19 note. Andy Lloyd, a spokesman for Barrick in Toronto, didn’t immediately respond to a call and e-mail outside normal office hours seeking comment. Jane Clapcott, a Credit Suisse spokeswoman in Sydney, declined to comment.
Barrick agreed in August 2013 to sell the Darlot, Granny Smith and Lawlers mines in Western Australia state to South Africa’s Gold Fields Ltd. for about $300 million US. It sold other Australian assets to Northern Star Resources Ltd. for about A$100 million ($78.4 million US) last year.