Canada’s Barrick Mining explores IPO of North American assets

Barrick Mining said on Monday it was exploring an initial public offering of a subsidiary that would hold its North American gold assets as bullion prices this year have rallied to record highs.

US-listed shares of the Canadian miner rose 3.7% in premarket trading. Barrick opened up 1.4% at C$59.16 on the TSX.

Reuters reported last month, that the company was considering splitting into Africa- and North America-focused entities. And Barrick said on Monday that the new company would comprise its joint venture interests in Nevada Gold Mines (NGM), Pueblo Viejo in the Dominican Republic, and the Fourmile gold discovery.

A source close to Barrick said it had appointed Goldman Sachs and Klein and Company as its advisors for the spinoff and that, although the location of the new entity has yet to be decided, Barrick’s board could consider a New York listing.

Reversing randgold merger, shedding risky assets

A split would reverse Barrick’s 2019 merger with Randgold Resources and comes as investors pressure the miner to use a historic rally in gold prices to boost returns, while shedding riskier assets in Africa, Papua New Guinea and Pakistan’s Reko Diq.

The Canadian miner said it plans to offer a small minority interest in the new company while retaining a significant controlling majority.

It said it would provide an update on the IPO evaluation in February.

Gold has hit a series of record highs this year on expectations of lower interest rates and safe-haven flows.

Barrick jointly owns NGM - the world’s largest gold-producing complex - with rival Newmont and is also looking to develop the Fourmile gold mine in Nevada.

“This plan essentially packages up the parts of Barrick the market is currently most excited about into a vehicle that is likely to become an acquisition target for Newmont,” said Shane Nagle, an analyst at National Bank of Canada Financial Markets.

Barrick has had a volatile year, marked by a drawn-out dispute over its gold mine in Mali, which led to a $1 billion write-off of the asset and the sudden exit of Mark Bristow as its CEO.

Following two years of negotiations, Barrick reached an agreement last month with Mali’s military-led government to resolve all their disputes over the Loulo-Gounkoto gold mining complex.

Besides Nevada and Mali, its working facilities include copper mines in the Democratic Republic of Congo, gold in Tanzania, the Dominican Republic, and Papua New Guinea.