TORONTO – Hard hit by the plummeting gold price to say nothing of cost overruns and delays at the Pascua-Lama gold project in Chile and Argentina, Barrick Gold has decided to divest its energy division, Barrick Energy. The company said the move is part of an ongoing process to shed non-core assets.
The sale price is reported to be $455 million, with Barrick to net $405. The transactions consist of the sale of certain assets to Venturion Oil for consideration of approximately $59 million; the sale of certain assets to Whitecap Resources for consideration of approximately $174 million; and after giving effect to the asset sale transactions, the sale of the shares of Barrick Energy and its assets to Canadian Natural Resources Limited for consideration of approximately $173 million and a gross overriding royalty on certain lands.
The divestiture is expected to close on or prior to July 31, 2013, subject to customary conditions.
Barrick expects to take a US$500-million loss in Q2 this year. About US$90 million relates to goodwill, and the balance is the difference between the net proceeds of the Barrick Energy sale and its carrying value at June 30, 2013.
The company's website is at Barrick.com.