Barrick Gold puts its little piece of PNG up for sale

What does a major international mining company do after it has raped and pillaged the land, rivers and communities in a far off corner of the world and run away with all the profits?

It puts that land and those communities up for sale so a second tier mining corporation can come and fill its stomach…

Barrick Gold Corp suffers monster US$2.8 billion writedown, plans asset sales, layoffs and major debt reduction  

Peter Koven | Financial Post

John Thorton wants to sell off the land and communities of Porgera now Barrick has exhausted its appetite

John Thorton wants to sell off the land and communities of Porgera now Barrick has exhausted its appetite

Barrick Gold Corp. is putting its Porgera and Cowal operations up for sale and setting a major debt reduction target for 2015 as the company starts to implement a long-discussed strategy to become leaner and less centralized.

The Toronto-based miner also reported a monster fourth quarter loss on Wednesday evening of US$2.85 billion. Barrick took a US$930-million writedown on the Lumwana mine (which is poised to close), and a US$778-million impairment on Cerro Casale, a project that would be tough to justify at current metal prices. There were also writedowns on other assets.

Barrick shares rose more than 7% just before 11 a.m.

Back in the summer, chairman John Thornton talked about a plan to take Barrick “back to the future” with a leaner model that would empower managers at the mine level. The company provided more details of that plan on Wednesday, noting that it will cut head office jobs by nearly half.

Barrick also said it will continue to repair its balance sheet in the short term, with a plan to reduce net debt by “at least” US$3 billion in 2015. The gold miner acknowledged that it got away from its roots by taking on too much debt in recent years.

“Prudent financial management was a bedrock principle of the company. Our current level of debt is inconsistent with that principle, and that inconsistency is reflected in the company’s share price,” Barrick said in a statement. It sounded exactly like something Mr. Thornton would say.

Barrick said it has “a number of options” to meet this debt reduction target, but did not elaborate.

Selling the large Porgera mine in Papua New Guinea, which produced nearly 500,000 ounces in 2014, would provide an immediate boost to the balance sheet. However, that operation is plagued by social problems that could deter any bidder from paying a full price. Cowal is a much smaller operation and would not fetch a high price.


Leave a comment

Filed under Papua New Guinea

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s