Barrick Gold Mulling Divestment of African Stakes – Report
Barrick Gold, after partially floating African Barrick in 2010, has been reported to be mulling further divesting its 74 per cent hold in the African project, the Financial Times reported on Thursday.
The divestment to any successful potential bidder could mean a full takeover of Tanzania's largest gold producer, according to FT.
The Canadian miner has hired UBS to help study the miner's options for African Barrick.
Among those which have expressed interest in African Barrick is Chinese copper and gold state-controlled miner Zijin Mining Group, FT reported, citing an unidentified person with knowledge of the discussions.
Yet a second unidentified source said Barrick Gold suddenly stopped work on what could have been a possible sale this week, creating doubts if the company is serious in divestingthe London-listed gold producer.
After being spun off from its Canadian parent in 2010, African Barrick has performed poorly, struggling to reach production targets, as it coped up with poor power supply brought by interruptions from Tanzania's national grid disrupted work. Shares have sunk by as much as 30 per cent since listing.
In July, the African miner said output fell 14 per cent in the first six months of the year.
The interest of Zijin Mining Group in African Barrick, according to FT's sources, could encourage other gold miners to take a look into the African miner. In fact, London-listed miner Randgold and South African miner have previously been named as possible buyers of African Barrick, the report said.
African Barrick's market value was placed at £1.6 billion.