African Barrick Gold plunges as talks finish

SHARES in London-listed miner African Barrick Gold (ABG) plummeted more than 20 per cent yesterday, as its Canadian parent Barrick Gold said it was no longer in talks to sell the unit to a national Chinese gold company.

The talks with China Gold regarding the London-listed gold producer, which is 74 per cent-owned by its parent Barrick Gold, were first announced in August.

Calling time on months of talks, Jamie Sokalsky, president and chief executive of Barrick Gold, said yesterday that the company would “only proceed with opportunities that generate acceptable value”, suggesting that the China Gold offer fell short of what Barrick Gold was after.

He added that ABG’s assets hold “significant potential”, and Barrick Gold would continue to seek the best way to realise that value for shareholders.

Additionally, ABG – whose flagship mine Bulyanhulu in Tanzania has performed well – has kicked off an operational review of the business, to look at costs and the various assets in the portfolio, among others.

Greg Hawkins, chief executive of ABG, said that the sale process had emphasised the “fundamental long-term” value of its portfolio.

Hawkins added that he had a high degree of confidence in the business, and believed the operational review will “further improve the return profile of the business”.

However, Jonathan Guy, analyst at RBC Capital Markets, said yesterday that he believed the “disposal of the interest in ABG remains the preferred option for Barrick”.

Shares in ABG closed down 20.7 per cent yesterday at 352.4p.