By Euan Rocha
TORONTO, March 10 Barrick Gold Corp
said on Monday it plans to sell about 13.5 percent of its
holdings in its majority-owned subsidiary African Barrick Gold
Toronto-based Barrick, which currently owns a roughly 303.25
million shares in African Barrick, is selling 41 million shares.
The gold miner will still own a majority stake of just over 60
percent in the Africa-focused miner following the close of the
Barclays analyst Farooq Hamed believes the stake sale will
result in proceeds of just over $200 million that will help
bolster the gold miner's balance sheet and allow it to trim its
The move is the latest attempt by the world's largest gold
miner to trim its asset base and reduce its exposure to higher
In 2012, the company attempted to sell a part, or all of its
interest in African Barrick Gold to China National Gold Group,
but those talks fell apart last year.
The company has since gone on to sell a number of non-core
assets. In January, Barrick Gold agreed to sell its Kanowna gold
mine in Western Australia to Northern Star Resources for A$75
Last August, the company said it has agreed to sell its
Granny Smith, Lawlers and Darlot gold mines in Western Australia
to Gold Fields for $300 million.
The sale of the 41 million African Barrick shares represents
about 10 percent of the company's outstanding share base.
The shares will be sold to institutional investors and
Barrick has appointed UBS Ltd, J.P. Morgan Securities and RBC
Europe Ltd to act as joint book runners in relation to the deal.
Barrick's move to trim its stake comes at a time when shares
in African Barrick have been on a tear, largely driven by a
bounce in the price of gold since the beginning of the year. The
price of spot gold has risen more than 11 percent since
the beginning of the year to around the $1,340 an ounce level.
The London-listed shares of African Barrick have risen more
than 65 percent over the same period, as the company told its
investors that they will see a big increase in gold output and
stringent cost cutting over the coming year.
Barrick has undertaken not to dispose of any further African
Barrick shares without the consent of the book runners during
the next 120 days. The consent shall not be required, if African
Barrick receives a full takeover bid within the next six months.
Barrick is also allowed to do a single sale of 10 percent to
20 percent of its remaining holdings African Barrick to a single
purchaser as part of a single transaction, provided the buyer
agrees to be bound by a similar restriction for the remainder of
the lock-up period.