Barrick Sells 50-percent Stake in Zaldivar Copper Mine to Antofagasta

Barrick Gold Corp. (TSX:ABX,NYSE:ABX) announced that it’s reached an agreement to sell a 50-percent stake in the Chile-based Zaldivar copper mine to Antofagasta plc (LSE:ANTO) for $1.005 billion in cash.
The Financial Times’ Peter Koven has described the deal as “an absolute must” for Barrick, which is suffering from high debt and the low gold price.
As quoted in the press release:

Antofagasta will pay Barrick $980 million in cash upon closing and $25 million in additional cash payments over the next five years for a 50 percent stake in the Zaldívar mine. The transaction is expected to be completed in late 2015 and is subject to customary closing conditions.
As joint venture partners, Barrick and Antofagasta will work together to maximize the value of the Zaldívar mine, leveraging the collective expertise and experience of both companies. Barrick has intimate knowledge of the Zaldívar operation and its potential. Antofagasta will help to realize that potential by leveraging its deep operating expertise in Chile, including potential synergies with its existing portfolio. Such synergies may include the ability to leverage Antofagasta’s extensive in-country procurement programs, contractor relationships and administrative efficiencies.

Kelvin Dushnisky, co-president of Barrick, commented:

The sale of 50 percent of Zaldívar is consistent with our strategy to create long-term value for our shareholders. By selling a stake in this non-core asset, we strengthen our balance sheet while maintaining significant exposure to a strong cash-generating operation. Following a highly competitive auction process, we are pleased to reach an agreement with the ideal partner for Zaldívar. Antofagasta has an outstanding track record of building and operating mines in Chile, and we see this as the first step in an ongoing, collaborative partnership. There are many potential opportunities to benefit from Antofagasta’s experience as Barrick evaluates development projects in the future.

Click here to read the full Barrick Gold Corp. (TSX:ABX,NYSE:ABX) press release.