Canadian mining group Barrick Gold has confirmed that it has been in discussions to sell a 74 per cent stake in African Barrick Gold to a Chinese company
Talks have been under way between Barrick and China National Gold Group Corporation for sometime, but the discussions have remained at the preliminary stage, said a Barrick source.
The source mentioned that Zijin Mining Group, a Chinese copper and gold miner, has also indicated interest in African Barrick.
The UK-listed African Barrick’s shares surged more than 11 per cent in early trading on 16 August 2012 soon after confirmations of the discussions.
China Gold, which has subsidiaries listed in Hong Kong and Toronto and on Beijing’s A share market, is the biggest producer of gold in China.
African Barrick, Tanzania’s largest gold producer, has performed poorly since being spun off from its Canadian parent in 2010 with shares slumping close to 30 per cent since listing.
Barrick Gold signalled a renewed focus on disciplined spending as it announced a big cost over-run at its key development project in South America.
Jamie Sokalsky, the recently-appointed chief executive of Barrick, has pledged that returns would drive production and production would not drive returns, as he unveiled a review of the miner’s sprawling portfolio of assets recently.
Since its listing in London, African Barrick has struggled to hit its production targets, as interruptions to its power supply from Tanzania’s national grid has been disrupting work.
