BARRICK Barrick Mining’s proposal to separate its US assets from operations in riskier jurisdictions has captured the attention of rival miners, analysts were quoted as saying in an article by Bloomberg News on Monday.
A standalone entity containing Barrick’s Nevada joint venture holdings, the Fourmile discovery and a Dominican Republic mine would appeal to Newmont Corp. and Agnico Eagle Mines, Jefferies analysts wrote.
The structure would prove simpler to acquire than Barrick in its current form, being smaller and eliminating the need to divest non-core assets in challenging locations, Jefferies analysts said. Agnico and Newmont declined to comment.
Barrick’s plan to explore an initial public offering for its North American gold assets follows an October Bloomberg report that Newmont had examined a transaction to gain control of the Nevada mines the companies jointly operate, which have benefited from recent capital investment.
The proposed vehicle is “likely to become an acquisition target for Newmont”, National Bank Financial analyst Shane Nagle wrote to clients.
However, Barrick will probably prioritise additional drilling at Fourmile to expand the resource before contemplating any sale, which would need to command a substantial premium, the Jefferies analysts said.
The Nevada operations have become increasingly valuable following significant investment programmes, making them attractive targets for consolidation in North America’s gold sector.
