Barrick Gold Corporation (ABX - Analyst Report) announced its plans to divest the Plutonic mine in Western Australia to Northern Star Resources Ltd for total cash consideration of A$25 million. The transaction is subject to certain closing conditions and is expected to close in Feb 2014.
UBS Securities Canada Inc. and BofA Merrill Lynch are acting as financial advisors to Barrick and Clayton Utz is Barrick’s legal counsel for the transaction.
As part of its disciplined capital allocation framework, the company is actively pursuing opportunities to optimize its portfolio, including the divestiture of certain non-core assets. In Oct 2013, Barrick completed the selling of its Yilgarn South assets (Yilgarn South) comprising the Granny Smith, Lawlers and Darlot mines, in Western Australia to Gold Fields Limited (Gold Fields). Barrick sold the assets for a total consideration of $300 million, subject to a closing adjustment deduction estimated at $30 million.
Lower metal pricing coupled with higher tax and interest expenses dragged down Barrick’s profit in third-quarter 2013, reported on Oct 31. However, adjusted earnings beat the Zacks Consensus Estimate. Revenues fell year over year, but beat expectations. The company saw higher gold and copper production in the quarter. While Barrick lowered its gold production guidance for 2013, it raised its copper production outlook.
Currently, Barrick carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the gold mining industry include Golden Star Resources, Ltd. (GSS - Snapshot Report), Pretium Resources Inc. (PVG - Snapshot Report) and AngloGold Ashanti Ltd. (AU - Snapshot Report). While Golden Star Resources has a Zacks Rank #1 (Strong Buy), both Pretium Resources and AngloGold Ashanti hold a Zacks Rank #2 (Buy).