Barrick Gold will Spin Off its Africa Operations through IPO

Posted by Staff Writer on Sunday, February 21, 2010 at 11:19pm.

Barrick Gold, a Canadian Mining company announced on Friday the creation of African Barrick Gold, a new company whose equity it will list with the United Kingdom Listing Authority and to admit to trading on the London Stock Exchange, subject to market conditions.  ABG also intends to seek a future listing on the Dar es Salaam Stock Exchange in Tanzania.

In each case, the new listing will be subject to ABG fulfilling all of the listing requirements of the London Stock Exchange and the Dar es Salaam Stock Exchange as applicable.

African Barrick Gold will hold Barrick’s African gold mines and exploration properties. ABG will offer approximately 25%(12) of its equity in an IPO and Barrick will retain the remaining interest.

The pricing and terms are yet to be determined; however, the offering is expected to be priced in late March, with closing expected to occur by the end of March.

ABG is expected to have an initial cash balance of $0.28 billion and the net offering proceeds will be paid to Barrick.

This return of capital to Barrick is expected to provide increased financial capacity to fund the Company’s pipeline of development projects.

African Barrick Gold is expected to produce approximately 800,000-850,000 ounces in 2010 and had total reserves of 16.8 million ounces(3) (100% basis) as of December 31, 2009.

“As an Africa-focused public company, we believe that the new company will be better positioned to generate shareholder value from its operating platform. African Barrick Gold’s range of growth options and ability to finance those options will be expanded and the intensity with which these options will be pursued will be improved and will be driven by an incentivized management team, guided by an experienced Board of Directors. In addition, we expect that listing on the Dar es Salaam Stock Exchange will enhance the profile of the new company in Tanzania and allow for local participation in this national champion.” said Barrick’s President and CEO, Aaron Regent.