With these deals, the company intends to sell its non-core assets in Nevada for an aggregate value of $720 million in all-cash transactions. Barrick Gold and Kinros have also agreed to form an exploration alliance, which will own large land package on the Bald Mountain property.
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Waterton is buying Ruby Hill and Barrick’s 70% interest in the Spring Valley project.
Kinross is buying Bald Mountain and Barrick’s 50% stake in Round Mountain for $610 million.
For Barrick it means it can now claim to have reached its target this year to decrease debt by $3 billion.
The deals Thursday bring its total asset sales, joint ventures and partnerships to $3.2 billion for this year.
This transaction is critical for Kinross, which has more than US$1 billion of cash and a declining production profile over the next five years. It also gives the miner full ownership of the Round Mountain operation, in which it was formerly a 50 per cent partner with Barrick.
Separately, it will sell the company’s 70 percent interest in the Spring Valley project and its 100 percent interest in the Ruby Hill mine to subsidiaries of Waterton, a mining-focused private equity firm, for $110 million in cash.
“Through this sales process we have developed a strong working relationship with Waterton and we look forward to collaborating with them in the future should the right opportunities arise”, added Mr. Dushnisky. The transaction with Canadian-based Kinross, a senior gold mining company with mines and projects in the United States, Brazil, Chile and Ghana, is expected to be completed by mid-January 2016.
Both deals are subject to the usual legal and regulatory conditions.
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“One thing Waterton is also extremely good at is consolidating multiple owners and it would be our hope we can do the same thing here”, Elishis said. But Barrick is nonetheless giving up coveted ground in Nevada that it’s unlikely to have sold without the pressure of lower gold prices and the scrutiny of its leveraged balance sheet by the market during a period of weakness.
