Three Barrick Gold Corporation (NYSE:ABX) mines moving to Gold Fields’ side of fence

Posted by Steve Raasch August 26, 2013 0 Comment 798 views

Barrick Gold Corporation (NYSE:ABX) announced that it will be selling-off 3 of its mines located in the Australia, to Gold Fields Ltd. The South Africa based miner will be buying these mines called the Yilgarn South Assets, for $300M. This sale will be subject to all the customary conditions and the Australian Foreign Investment Review Board approval will be necessary.

Sales proceeds

ABX said that in 2012, the 3 mines that are part of this Yilgarn South Assets produced 452,000 ounces of gold in totality. An additional 196,000 ounces were produced in the 1st half of 2013. The expected closing date for this transaction is 1 October 2013. The proceeds of the sale will be used for all general corporate purposes such as debt repayment. All these will be recorded in the 2013 Q4.

Jamie Sokalsky, the chief executive officer said that this sale demonstrates the progress that the company is making to optimize the ABX portfolio and also maximize free cash-flow. He also extended his appreciation and gratitude to the Yilgarn South employees who had made a significant contribution to the company for so many years.

Cost-cutting spree

ABX is one of the largest gold-producers in the world. It has been taking numerous steps to bring-down operating costs by reducing staffing levels and lowering its capital spending. The company said that from 2013-2014 it will axe its costs from $1.5B to $1.8B. Most of these efforts are being put into its Argentinean project. In the quarter that ended 30 June, the company’s adjusted earnings stood at US$663M or 66cents. This was 10 cents above analysts’ estimates, who had expected it to drop from the 82 cents that it was at, last year.

Friday’s trading session

Over the past one year, Barrick stock has been on the downslide. The stock rose by 2.61% in Friday’s trading session. The opening price of the shares was $19.54 which rose to a high of $20.30 and closed at $20.07. More than 18.05M shares were traded on Friday while the average volume of shares traded over 30 days was 17.81M. The company has a market cap of $20.09 billion.

About Steve Raasch

Steve Raasch is a breaking news reporter for GDP insider. During his nearly two decades of editorial experience, Steve has covered a variety of topics including small business, health, personal finance, advertising, workplace issues and consumer behavior. Steve is very passionate about his work. Steve earned a master of arts degree in international relations from the Johns Hopkins University School of Advanced International Studies in Washington.

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