TORONTO (miningweekly.com) – World-number-one bullion miner Barrick Gold is expected to continue to generate good cash flows and manage investment decisions “prudently”, Moody's Investors Service commented on Wednesday.

Barrick announced a day earlier that subsidiary Barrick Australia Financing had priced $1,25-billion in debt securities, comprising $400-million of 4,95% notes due 2020 and $850-million of 5,95% notes due 2039.

The proceeds will be used mainly to further reduce the liability related to Barrick's floating spot-price gold contracts.

Moody's has assigned a 'Baa1' rating to the notes, and also affirmed its existing 'Baa1' senior unsecured ratings of Barrick and its various subsidiaries.

The ratings “reflect the strong operating cash flow capacity of the company, its moderate absolute level of debt and strong cash position”, Moody's said.

The outlook also reflects an expectation that gold prices will continue at levels well above Barrick's cost position over the next 12 to 15 months.

“While Moody's expects Barrick to continue to opportunistically look to grow by acquisition, we anticipate that such will be done in a disciplined manner and not further erode the capital structure,” it said.

For now, the gold-miner's announcement on Monday that it will buy 70% of the El Morro copper and gold project, in Chile, from Xstrata, for $465-million is “comfortably accommodated” within Barrick's liquidity profile, the note said.

Toronto-based Barrick expects to produce7,2-million to 7,6-million ounces of gold this year, at net cash costs of between $360/oz and $385/oz, or total cash costs of $450/oz to $475/oz.

In 2010, production is forecast at between 7,7-million and 8,1-million ounces, at lower total cash costs than 2009.

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