Barrick Mining said Monday it is evaluating an initial public offering for a new subsidiary that would house its North American gold assets, taking advantage of record bullion prices.
US-listed shares of the Canadian miner rose 3.4% in early trading following the announcement.
The potential separation would effectively unwind Barrick’s 2019 merger with Randgold Resources.
It also comes amid investor pressure for the company to capitalise on the historic rally in gold to improve returns and streamline its portfolio by reducing exposure to higher-risk operations in Africa, Papua New Guinea and Pakistan’s Reko Diq project.
Gold prices have repeatedly notched record highs this year as expectations of lower interest rates and demand for safe-haven assets have strengthened.
What the new entity would hold
The proposed entity would include Barrick’s stakes in Nevada Gold Mines and the Pueblo Viejo operation in the Dominican Republic, as well as the Fourmile gold discovery.
Barrick jointly owns Nevada Gold Mines — the world’s largest gold-producing complex — with rival Newmont, and is also pursuing development of the Fourmile deposit in Nevada.
Barrick has long suggested it could package these assets into a new entity, which would allow its North American operations to perform independently of the more politically difficult environments many other mines work in.
The miner also indicated its intention to only sell a minority stake in the IPO, retaining a controlling majority interest in the new company.
The company has said it expects to update about the IPO review process in February.
Leadership and performance pressures
Interim CEO Mark Hill stated that the company is still focused on enhancing operational execution and providing greater value to shareholders.
“We are singularly focused on driving improved performance and shareholder value with the right teams now in place to deliver on our commitments,” Hill informed investors.
The company has had a turbulent year, including a protracted dispute over its Mali operations that resulted in a $1 billion write-off and the abrupt departure of former CEO Mark Bristow.
Barrick resolved its two-year standoff with the Malian government last month, reaching a settlement covering all outstanding issues tied to the Loulo-Gounkoto complex.
Beyond Nevada and Mali, the miner’s portfolio includes copper operations in the Democratic Republic of Congo, as well as gold assets in Tanzania, the Dominican Republic and Papua New Guinea.
The prospective IPO demonstrates how record bullion prices are forcing big gold producers to reexamine long-standing business structures and regional distribution strategies.
As the industry adjusts to rising gold prices and shifting investor expectations, Barrick’s next measures will be widely monitored.
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