Barrick Gold Corporation says it has reached an agreement to sell 100 percent of the Cowal mine in New South Wales, Australia to Evolution Mining for US$550 million in cash on closing.
Co-President of the group, Kelvin Dushnisky said the sale of Cowal is consistent with the strategy we have outlined to create long-term value for our owners, making a significant contribution to our debt reduction target while further focusing the geographic footprint of our portfolio.
“We are pleased to have achieved a successful outcome following a competitive auction process in the first of several asset sales now underway. We would like to extend our gratitude to our Cowal employees, who have made a significant contribution to Barrick since the mine began production in 2006, and we wish them future success as part of the Evolution team.”
The company said the proceeds from the sale of Cowal will be used to pay down debt. The divestment of Cowal will also contribute to reduced general and administrative costs as Barrick completes the closure of its office in Perth, Australia. The transaction is expected to be completed in the third quarter of 2015 and is subject to customary closing conditions.
Evolution Mining was created in late 2011 as a mid-tier Australian gold producer through a merger of Catalpa Resources and Conquest Mining. Evolution currently operates five gold and silver mines in Queensland and Western Australia. For the year ended June 30, 2014 the company produced approximately 428,000 gold equivalent ounces.
Credit Suisse is acting as financial advisor to Barrick. Davies Ward Phillips & Vineberg LLP and Herbert Smith Freehills LLP are acting as legal counsel to Barrick.