JOHANNESBURG (miningweekly.com) – African Barrick Gold (ABG), a spin-off company for TSX-listed Barrick Gold’s African assets, on Friday raised £581,2-million in an initial public offering (IPO) on the London-bourse.

It sold just under 101,1-million shares, representing 25% of the company’s enlarged issued share capital, at £5,75 a share.

Conditional trading of the gold miner’s shares had started on the main bourse of the LSE on Friday, with the market capitalisation of African Barrick Gold expected to be £2,3-million.

Unconditional trading of its shares would start on March 24.

"We are delighted with the strong support received for the IPO of ABG, and are especially pleased by the level and quality of investor demand in the current market environment. The collective support of these investors provides us with a strong financial position from which to pursue our growth strategy through exploration, potential acquisitions and the development of advanced-stage projects,” ABG CEO Greg Hawkins commented in a statement.

Following deductions for underwriting, commissions and expenses of the IPO, the company would be left with net proceeds of about £547-million, which it would use to repay outstanding loans of $575-million to parent company Barrick Gold and its other subsidiary companies.

Further, the African gold miner said that it would use its initial cash balance of about $280-million to fund its growth strategy.

Meanwhile, ABG confirmed that Barrick Gold CEO Aaron Regent has been appointed as its nonexecutive chairperson; Kevin Jennings as CFO; former AngloGold Ashanti CEO Bobby Godsell, Michael Kenyon, Andre Falzon and James Cross as independent nonexecutive directors; Stephen Galbraith as nonexecutive director; and Derek Pannell as senior independent nonexecutive director.

Barrick Gold announced in February that it would spin off its African gold assets into a new London-listed company to help unlock value in its Tanzanian assets, which produced around 10% of the group's gold output in 2009.

ABG was starting out with four mines in Tanzania, as well as a number of exploration properties.

At the time, the parent company said it expected ABG to produce between 800 000 oz and 850 000 oz in 2010 and had total reserves of 16,8-million ounces at the end of last year.

The gold miner reported that the African assets had produced about 112 200 oz during the first two months of this year.

Meanwhile, the company noted that it expected mining activity at its Bulyanhulu mine to resume shortly.

Three workers had been killed in a rock fall at the mine on Tuesday.

“The company intends to keep the area of the rock fall closed until the incident has been investigated, the cause understood and any necessary actions taken by ABG as a result of the incident,” it stated.

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