Barrick Supports Acacia-Endeavour Merger If Good for Investors

(Bloomberg) -- Barrick Gold Corp., the majority-shareholder of Acacia Mining Plc, says it would support a merger between Acacia and Africa-focused gold miner Endeavour Mining Corp. if a deal benefits investors.

Acacia and Endeavour remain in “preliminary discussions” about a merger, Barrick President Kelvin Dushnisky said Thursday in a phone interview. “From Barrick’s perspective, if there was a deal to be made that made sense for our shareholders, we’d be supportive.”

Shares in Acacia soared last month after Acacia confirmed it was in early-stage talks with Endeavour on a tie-up that would create a company with a combined value of about $4 billion.

Barrick is not actively seeking other buyers for its Acacia stake, Dushnisky said Thursday. The world’s largest gold producer would be “open-minded” about any unsolicited offers for the asset, Dushnisky added, declining to say if Barrick has been approached.

Meanwhile, Dushnisky said Barrick continues to be in active discussions with one bidder for its 50 percent stake in the Kalgoorlie Super Pit mine in Australia.

‘Happy’ to Hold

According to people with knowledge of the matter, that buyer is Minjar Gold Pty, and its $1.3 billion offer has been delayed by difficulties securing financing. Barrick hasn’t confirmed the bidder and Dushnisky wouldn’t say how long the company will wait before walking away.

“They’re working through their own process,” Dushnisky said of the bidder. “If they arrive at a price that’s attractive to us we’re sellers, but at the same time, if not, we’re happy to be owners.”

In an interview in October, Dushnisky said Barrick would be interested in selling a stake in a package of assets on the 140-kilometer stretch between Argentina and Chile that includes its Veladero mine and its Pascua-Lama project. On Thursday, he said there is a “high likelihood” that such a potential sale would be to a single partner that would help Barrick finance development while also providing technical mining expertise.

On Wednesday, Barrick reported fourth-quarter net income was $425 million, compared with a net loss of $2.62 billion a year earlier. Earnings excluding one-time items were 22 cents a share, more than the 20-cent average of 21 analysts’ estimates compiled by Bloomberg. Sales climbed 3.6 percent to $2.32 billion, topping the $2.23 billion average of eight estimates.

Barrick plans to cut its total debt by $2.9 billion, to $5 billion, by the end of 2018, with about half of the reduction targeted for this year. The company will use the proceeds from asset sales, joint venture partnerships, cash and free cash flow to achieve that, Chief Financial Officer Catherine Raw said on the company’s earnings conference call Thursday.

--With assistance from Scott Deveau

To contact the reporter on this story: Danielle Bochove in Toronto at dbochove1@bloomberg.net.

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Steven Frank, Joe Richter