Barrick Gold Corporation

Rumours: Barrick May Be Selling WA Gold Mines

Barrick Gold may be selling three gold mines in Western Australia if rumours are to be believed. Why would the company need to liquidate its assets in one of the top industries in Australia? Sources close to the company have intimated that the company is struggling to stave off a credit rating downgrade and wishes to reduce its debt.

Reuters reported that Barrick has asked UBS and Merrill Lynch to look into the feasibility of the sale of three of its mines and report back. The mines being considered for sale make up Barrick’s Yilgarn South assets and are comprised of the Darlot, Granny Smith and Lawlers gold mines.

Barrick Gold Corporation

There may be interest from the Chinese companies Zijin Mining and Sandong Gold according to some unnamed sources. Barrick has remained silent on the news of the rumoured sale so no confirmation of this was available. The company did not produce a spokesperson to address the rumours.

Whether or not the sale would result in any change in the number of mining jobs in WA is not yet known. A purchase could suggest the new owners might make changes that could lead to construction jobs and jobs for contractors. Until the news is verified and made public, any new jobs in the gold mining industry are also just rumours.

The Yilgarn South assets produced 452,000 ounces of gold in 2012 at total cash costs of $768 an ounce.
Barrick is due to announce its first quarter performance this week, and analysts have tipped a fall in earnings and revenue.

Western Australia is home to the nation’s top four producing gold mines, with Australia remaining the world’s second largest gold producer in 2011, according to Surbiton Associates.

The Super Pit in Kalgoorlie, a joint venture between Newmont Mining and Barrick Gold, was Australia’s top gold mine last year, producing 796,000 ounces.

Second was Newmont’s Boddington mine producing 742,000 ounces, with Newcrest’s Telfer project following close after at 554,779 ounces.

Gold Fields’ St Ives mine completed the top four at 464,546 ounces.

Almost 264 tonnes of gold were produced in total last year, two tonnes less than in 2010.

While total production slid slightly it was offset by much higher prices, and Surbiton said at current prices the 2011 production total would fetch around $13.5 billion.

China remains the world’s largest gold producer, with the United States coming third, only slightly behind Australia at 240 tonnes.

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