JOHANNESBURG (miningweekly.com) – Shares in African Barrick Gold (ABG) jumped in London on Thursday as Barrick Gold confirmed that it was in discussions with a Chinese group about its majority shareholding in the Tanzania-focused miner.
Canada’s Barrick Gold said it had started preliminary discussions with China National Gold Group (China Gold) as part of its portfolio review announced at the end of July.
“Discussions are at an early stage, and there can be no certainty that these discussions will result in the acquisition of all or part of Barrick's holding in ABG,” the world’s largest producer of bullion, which owns 73.9% of ABG, said in a statement.
Should China Gold acquire more than 30% of the voting interest in ABG, it would be required to make an offer for the entire share capital of the London-listed miner, the Greg Hawkins-led AGB said in a separate statement.
Barrick CEO Jamie Sokalsky, who recently took over from ousted Aaron Regent, announced last month that it had initiated a project and capital allocation review, as the gold miner delivered disappointing second-quarter results.
The capital allocation review includes optimising Barrick's portfolio of assets and maximising returns on investment and free cash flow.
Liberum Capital said in a note to clients that the announcement should go some way to closing the discount of the ABG to its African peers. Shares in ABG surged 9.32% to 430p a share on Thursday.
UBS Limited is acting as financial adviser to Barrick regarding its holding in ABG.