Barrick Mining's Strategic Sale of Hemlo Gold Mine Explained
Barrick Mining's Strategic Sale of Hemlo Gold Mine
All amounts expressed in U.S. dollars.
Barrick Mining Corporation (NYSE:B)(TSX:ABX) has announced a significant step in its journey by reaching an agreement to divest the Hemlo Gold Mine to Carcetti Capital Corp, which will be rebranded as Hemlo Mining Corp (HMC) upon closing this deal.
This transaction is valued at up to $1.09 billion, a substantial amount that reaffirms Barrick's strategic focus on optimizing its asset portfolio. The total proceeds include:
- Cash payment of $875 million due at closing.
- Shares of HMC valued at $50 million, based on the company's concurrent equity offering to be issued upon closure.
- A structured cash payment linked to production and gold prices, potentially adding up to $165 million commencing in January 2027 over a five-year period.
HMC is currently listed on the NEX Board of the TSX Venture Exchange and anticipates a successful graduation to the TSXV in conjunction with taking ownership of Hemlo. HMC brings a robust management team, including Robert Quartermain, formerly the CEO of SSR Mining Inc., who has extensive operational expertise in the mining sector.
This strategic move also showcases HMC's backing by notable investors focused on advancing North American resource development. This includes partnerships with Wheaton Precious Metals and Orion Mine Finance Management, highlighting a solid foundation for HMC's future endeavors.
The capital generated from this transaction will significantly enhance Barrick's financial standing and facilitate the company's ongoing commitment to return value to its shareholders. Barrick's president and CEO, Mark Bristow, expressed confidence in the excellent stewardship of Hemlo under HMC's experienced management team.
Moreover, Bristow pointed out the successful sales of other non-core assets, including Donlin and Alturas, which are expected to result in a total of over $2 billion in gross proceeds. This highlights Barrick's strategic approach in focusing on its core assets by divesting non-essential projects while maximizing shareholder returns.
Barrick remains committed to Canada as a key region for its operations and aims to continually explore and develop world-class gold and copper mines. The company possesses a variety of promising early-stage projects, ensuring its presence in the region remains robust.
The completion of this transaction hinges on fulfilling customary closing conditions and acquiring necessary regulatory approvals, with an anticipated finish within the fourth quarter.
CIBC World Markets Inc. has been engaged as the financial advisor for this transaction, while Davies Ward Phillips & Vineberg LLP and Blake, Cassels & Graydon LLP provide legal counsel, ensuring a thorough and professional process.
About Barrick Mining Corporation
Barrick Mining Corporation is a prominent global player in the mining, exploration, and development sectors. With an extensive portfolio of premier gold and copper assets, including six of the world’s Tier One gold mines, Barrick operates in 18 countries across five continents. Its commitment to responsible mining and building strong partnerships is at the forefront of its operations. Shares of Barrick are traded on the New York Stock Exchange under the symbol ‘B’ and on the Toronto Stock Exchange under ‘ABX’.
Frequently Asked Questions
What is the financial value of the Hemlo Gold Mine sale?
The Hemlo Gold Mine is being sold for up to $1.09 billion, including various payment structures.
Who is Hemlo Mining Corp?
Hemlo Mining Corp, initially Carcetti Capital Corp, is the buyer of the Hemlo Gold Mine and will focus on developing and operating the mine.
What will Barrick do with the proceeds from the sale?
The proceeds from the Hemlo sale will strengthen Barrick's balance sheet and support capital return initiatives for shareholders.
What does this sale indicate about Barrick's strategy?
This sale emphasizes Barrick's strategy to focus on its core gold and copper portfolio, enhancing its financial solidity and growth potential.
How does Barrick plan to maintain its operations in Canada?
Barrick aims to pursue opportunities for developing world-class gold and copper mines while further exploring early-stage projects in Canada.
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