Barrick buys Porgera stake from S.Africa's DRDGOLD
11:37a ET April 12, 2007 (Reuters) TORONTO/JOHANNESBURG, April 12 (Reuters) - Barrick Gold Corp. will buy a 20 percent stake in the Porgera gold mine in Papua New Guinea from a unit of South Africa's DRDGOLD for $250 million, raising Barrick's stake in the mine to 95 percent, the company said on Thursday.
In addition to the cash price, Barrick will pay an unspecified "adjustment amount" to DRDGOLD unit Emperor Mines , which is undergoing a restructuring to clear debt. The deal will leave Emperor with A$130 million ($107.3 million) in cash.
Toronto-based Barrick, the world's biggest gold producer, will be entitled to the production and economic benefit of the additional interest in Porgera from the effective date of April 1, it said.
"Consolidating the ownership of the Porgera mine is part of Barrick's strategy of owning long-life world-class assets," Barrick Chief Executive Greg Wilkins said in a statement.
Emperor also granted Barrick -- which acquired its initial share in Porgera through its acquisition of Placer Dome last year -- the option of subscribing for up to 153.3 million of its shares, equal to about 13 percent of its capital.
Barrick is in discussions to possibly sell up to a 5 percent interest in the mine to Mineral Resources Enga Ltd., it said.
The boards of Emperor and DRDGOLD, which owns a 78 percent share of Emperor, support the deal and will recommend shareholders vote in favor.
The mine produced about 542,000 ounces last year and has proven and probable reserves of 9.42 million ounces, Barrick said.
DRDGOLD shares rose after the deal was announced, while Barrick eased 27 Canadian cents to C$32.70 on the Toronto Stock Exchange. |
