Barrick Gold Closes Marigold Stake Sale - Analyst Blog

Barrick Gold Corporation ABX announced that it has closed the sale of its 33.3% interest in the Marigold mine in Nevada to Silver Standard Resources Inc. SSRI for a total cash consideration of $86 million.

Marigold was jointly owned by Goldcorp Inc. GG and Barrick Gold where the former is the operator with a 66.7% stake. Goldcorp and Barrick announced in Feb 2014 that they will sell their respective stakes in the Marigold mine. The proceeds to Barrick are adjusted to reflect Goldcorp's position as manager and majority owner of the joint venture.

Barrick Gold sold its interest in the Marigold mine as part of its ongoing effort to shed some higher-cost assets, thereby reducing debt burden. On the other hand, the sale of the mine is in line with Goldcorp's strategy of focusing on core assets, thereby creating value for shareholders. This acquisition will help Silver Standard to add an operating mine in a well-established and low-risk mining jurisdiction.

Barrick Gold's share of proven and probable reserves at the end of 2013 was 1.4 million ounces, and its share of measured and indicated resources and inferred resources was 0.2 million ounces and 0.1 million ounces, respectively.

Barrick Gold released its fourth-quarter results in Feb 2014 Its adjusted earnings (excluding one-time items) for the quarter dropped to 37 cents per share from $1.16 in the year-ago quarter. Lower realized gold and copper prices and a decline in gold and copper sales volumes led to the decline in earnings.

Revenues fell around 29.5% year over year to $2,926 million in the reported quarter, but exceeded the Zacks Consensus Estimate of $2,815 million. Average realized price of gold decreased 25.8% year over year to $1,272 per ounce. All-in costs declined 8.1% to $1,317 per ounce while all-in sustaining costs fell roughly 14.2% to $899 per ounce in the reported quarter.

Barrick Gold currently carries a Zacks Rank #4 (Sell).

A better-ranked stock in the gold mining industry is AngloGold Ashanti Ltd. AU holding a Zacks Rank #1 (Strong Buy).