Barrick Gold Inc. (TSX:ABX) is in talks that could result in the sale of its majority holding in spinoff African Barrick Gold to China's largest gold producer.
The discussions between China National Gold Group Corp. and Barrick, the world's largest gold miner, are at an early stage and there is no guarantee they will result in the sale of any or all of Barrick's 73.9 per cent stake, the Toronto-based concern said in a release Thursday.
Still, the news sent African Barrick shares up almost nine per cent to 4.28 pounds Thursday afternoon on the London Stock Exchange.
Parent Barrick Gold's stock was up 63 cents or 1.84 per cent, at $34.89 at midmorning Thursday on the Toronto Stock Exchange, and 75 cents or more than two per cent at $35.44 on the New York Stock Exchange.
ABG is Tanzania's largest gold producer and one of the five largest gold producers in Africa, but recent production costs have been higher than anticipated, Barrick Gold said last month in its second-quarter financial report.
ABG was formed when Barrick decided to spin off its African operations into a separate company, Its shares began trading on the London exchange in March 2010.
Barrick Gold and ABG said in separate releases that if China Gold decides to acquire more than 30 per cent of the voting interest in ABG it would be required to make an offer for a full takeover.
The Canadian company says the negotiations are in line with "a renewed focus on maximizing shareholder value" adopted in its second-quarter financial report. . .View Full Article