TORONTO—Barrick Gold Corp. on Thursday said it had agreed to
sell 50% of its Zaldí var copper mine in Chile to Antofagasta PLC
for $1 billion in cash, and to work with its new Chilean partner on
maximizing the value of the mine.
The sale comes as Barrick, the world's largest gold company by
production, works toward a target of cutting debt by $3 billion by
the end of this year. The Canada-based company said that, with the
sale of the Zaldí var stake, it is almost two-thirds of the way to
its goal, with about $1.85 billion in transactions announced so
far.
"The sale of 50% of Zaldí var is consistent with our strategy to
create long-term value for our shareholders. By selling a stake in
this noncore asset, we strengthen our balance sheet while
maintaining significant exposure to a strong cash-generating
operation," said Kelvin Dushnisky, co-president of Barrick.
Like other miners, Barrick has been struggling with slumping
metals prices and pressure to cut costs.
Barrick said the partnership will benefit from Barrick's
"intimate knowledge of the Zaldí var operation and its potential"
as well as Antofagasta's deep operating expertise in Chile. The
partners will explore potential synergies, include the ability to
leverage Antofagasta's extensive in-country procurement programs,
contractor relationships and administrative efficiencies, it
said.
"Together, we believe that we are well positioned to enhance the
long-term value of the Zaldí var operation through our collective
best practices," said Diego Hernandez, chief executive of
Antofagasta.
Antofagasta, which will act as operator of the mine, will pay
Barrick $980 million upon closing and another $25 million over the
next five years, the company said. The transaction is expected to
be completed in late 2015.
Zaldí var produced 222 million pounds of copper last year.
Barrick said it would provide a general update on its
debt-reduction efforts when it releases its second-quarter results
on Aug. 5.
Write to Carolyn King at carolyn.m.king@wsj.com
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