GOLD: Barrick sheds three mines in Nevada, gains $720M

Barrick and Kinross will also form a 50-50 joint venture to explore on a large land package on Bald Mountain, with Kinross to operate any new mines.

Shares of Barrick Gold (ABX – Get Report) are declining by 2.47% to $7.10 at the start of trading on Thursday morning, after the gold mining company announced it is selling non-core assets in Nevada for $720 million.

Kinross will gain a 100% interest in Bald Mountain and an additional 50% of Round Mountain where it is operator. The gold producer will sell to two parties, and the deal will help the company reach its debt-reduction target for 2015 as gold prices remain in a multi-year slump.

“We see a clear path to upside at both assets, with known mineralization extensions throughout the Bald Mountain land package and ongoing operational and continuous improvement initiatives at Round Mountain”.

Barrick Gold Corporation said it would sell enough assets to kill $3 billion in debt. The consideration for these assets is $610 million in cash.

The mines include Bald Mountain, Ruby Hill, Barrick’s 50 percent interest in Round Mountain and the company’s 70 percent interest in the Spring Valley project.

“Through this sales process we have developed a strong working relationship with Waterton and we look forward to collaborating with them in the future should the right opportunities arise”, Dushnisky said.

The transaction is expected to be completed by the end of 2015 and is subject to customary closing conditions. The transaction with Canadian-based Kinross, a senior gold mining company with mines and projects in the United States, Brazil, Chile and Ghana, is expected to be completed by mid-January 2016. “These assets will increase our production, and are expected to lower costs and add significant and well-defined mineral resource potential”, Paul Rollinson, Kinross’ president and CEO, said.

“One thing Waterton is also extremely good at is consolidating multiple owners and it would be our hope we can do the same thing here”, Elishis said. All of the forward-looking statements made in this press release are qualified by these cautionary statements.