AFRICAN Barrick Gold (ABG)’s shares tumbled almost 19 per cent in London trading yesterday, after its parent company Barrick Gold sold off 10 per cent of the struggling miner’s stock.
Canada’s Barrick Gold raised £113m by selling 41m shares in its FTSE 250-quoted subsidiary, bringing its interest down to around 64 per cent.
“ABG has made excellent progress with its operational review to increase production and reduce operating and capital costs, and the results to date have been favourably received by the market,” said Jamie Sokalsky, Barrick’s president and chief executive.
“Barrick continues to support ABG management as they advance the operational turnaround and make other efforts to improve the business.”
Tanzania-focused gold miner ABG has struggled with operational issues and undergone a board overhaul in the past year. It has also had to deal with the industry-wide challenges of a weak gold price.
“This is a positive step by Barrick which significantly increases our free float,” said Brad Gordon, an industry veteran who took over as chief executive of ABG last August.
UBS, JP Morgan and RBC Europe acted as joint bookrunners on the share sale. ABG shares closed down 18.86 per cent.