Toronto, Canada — MININGREVIEW.COM — 23 February 2010 – Barrick Gold Corporation – the world’s leading gold producer, with 27 operating mines and many advanced exploration and development projects in ten countries across five continents – has announced plans to spin off its African assets and list them in London.
The company announced here as part of its fourth quarter results that it would create African Barrick Gold (ABG) as a new company whose equity would seek to list with the United Kingdom Listing Authority and to admit to trading on the London Stock Exchange, subject to market conditions.
It added that ABG “’ which will hold Barrick’s African gold mines and exploration properties “’ also intended to seek a future listing on the Dar es Salaam Stock Exchange in Tanzania. “ABG will offer approximately 25% of its equity in an IPO, and Barrick will retain the remaining interest,” Barrick said.
The pricing and terms are yet to be determined; however, the offering is expected to be priced in late March, with closing expected to occur by the end of March.
“ABG is expected to have an initial cash balance of US$280 million (R2.1 billion) and the net offering proceeds will be paid to Barrick. This return of capital is expected to provide increased financial capacity to fund the company’s pipeline of development projects,” Barrick said.
Looking ahead, ABG is expected to produce about 800 000 to 850 000 ounces in 2010 and has total reserves of 16.8 million ounces as of 31 December 2009.
“As an Africa-focused public company, we believe we will be better positioned to generate shareholder value from our operating platform,” said Barrick president and CEO Aaron Regent.
“ABG’s range of growth options and ability to finance those options will be expanded, and the intensity with which these options will be pursued will be improved and will be driven by an incentivised management team, guided by an experienced board of directors,” he added.
“In addition, we expect that listing on the Dar es Salaam Stock Exchange will enhance the profile of the new company in Tanzania and allow for local participation in this national champion,” Regent said.
Besides its Tanzanian gold mines, Barrick has two projects in Africa “’ the Kabanga nickel joint-venture project with Xstrata in Tanzania and the Sedibelo platinum project in South Africa.