Barrick Gold Gains On Plans To Trim Debt, Sell Assets

Barrick Gold Corporation ABX shares gained Thursday after its chief executive unveiled plans to cut debt by $3 billion and sell interests in two mines.

The company changed hands recently at $12.91, up 5.5 percent. Barrick shares are off by more than a third since last summer.

John L. Thornton, named chief executive of the company in April, said Barrick will reduce its net debt by at least $3 billion by the end of 2015, from more than $13 billion at December 31.

The company also posted a 57 percent decline in adjusted fourth-quarter earnings and took $2.8 billion in write-downs related to its copper operations in Chile and Zambia.

Divestments will include Barrick's Porgera operation which is the second-largest mine in Papua, New Guinea, and the Cowal mine in New South Wales, Australia.

Thornton, who last year replaced 87-year-old Barrick founder Peter Munk, said the company's debt currently is "inconsistent" with prudent financial management.

Barrick characterized his strategy as "going back to the future," and said he has cut the company's Toronto headquarters nearly in half since his arrival.

"Free from bureaucracy and middle management," workers can focus on "maximizing free cash flow, and shareholder returns," Thornton said.

Thornton noted that the company has less than $1 billion in debt due over the next three years, a $4 billion undrawn credit facility, and $2.7 billion in cash at the end of 2014.

Excluding write-downs and other items, adjusted net earnings fell 57 percent to $174 million or $0.15 a share, from year-earlier adjusted earnings of $406 million, or $0.37 a share.

Revenue fell 14.6 percent to $2.51 billion, from $2.94 billion a year earlier.

Wall Street expected a net loss of $0.13 a share, on revenue of $2.48 billion.

The net loss for the fourth quarter was $2.85 billion, or $2.45 a share, compared with a net loss of $2.83 billion, or $2.61 a share in the prior year quarter.