http://www.ft.com/intl/companies/mining
Barrick Gold is open to selling a wide range of assets as the world’s largest gold miner by output tries to cut its debts after a sharp fall in the gold price, according to one of its most senior executives.
However, co-president Kelvin Dushnisky said Barrick would not sell at any cost and made clear the miner was placing faith in a reshuffled management team and the productivity of its largest mines to try to ride out the storm engulfing the sector.
Gold miners across the world are eyeing more cost-cutting and restructuring after the price of the precious metal sank to four-year lows below $1,200 per ounce this month, leaving some companies haemorrhaging cash and investor support. Barrick’s share price has retreated to levels last seen two decades ago.
The gold price fall – from $1,900/oz in 2011 – has left many miners with lossmaking operations and sparked expectations of consolidation in the sector. This year Barrick and Newmont Mining, the second-largest producer, aborted advanced talks on a potential merger.
While many analysts have speculated that Barrick could return to talks with its US rival, Mr Dushnisky said discussions were “off the table”. He also accepted that Barrick would have little investor backing to try to acquire more mines from struggling rivals.
“We are focused on our own operations right now. [There is] nothing happening with Newmont,” Mr Dushnisky said.
“The mandate from shareholders is to keep the focus we have and don’t allow ourselves to be distracted . . . We think we have the best assets out there.”
Investors also want Barrick to strengthen the balance sheet, Mr Dushnisky said. The miner raised $3bn of equity last year to repay debt but net debt remains at $10bn. Barrick has said it will try to cut the level to about $7bn but has not given a timeframe, with relatively little debt falling due in the next three years.
Barrick has lost its perch as the world’s most valuable gold miner by market capitalisation. It remains the largest gold producer but has cut output and sold $1.4bn of assets since last year. Five of the 14 mines Barrick operates generate about two-thirds of profits and are relatively low-cost.
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