Barrick Gold has announced it has completed the sale of its Yilgarn South assets in Western Australia to South African company Gold Fields.
The $US270 million deal which was announced in August includes the Granny Smith, Lawlers and Darlot mines, adding about 400,000 ounces of output to Gold Fields’ portfolio.
Barrick sold the assets for total of $300 million, subject to a closing adjustment deduction estimated at a value of $30 million.
Gold Fields chief executive officer, Nick Holland said integration of the assets with the company’s existing operations has already begun.
“We are pleased to have completed this acquisition of in-production ounces,” he said.
“Today we commenced integrating these assets with our existing operations in Western Australia where Gold Fields now has five active mines.”
Gold Fields said there is potential for both regional and operational synergies with its existing assets in the region.
“This transaction also significantly advances Gold Field’ strategic objective of achieving a more balanced and globally diversified portfolio,” the company said.
Gold Fields’ Australian operations now account for about 42 per cent of the company’s total production.
Barrick said proceeds from the sale will be used for general corporate purposes, including paying down its debt.
“The divestiture of Yilgarn South is part of Barrick's ongoing portfolio optimisation process to maximise free cash flow in line with the company's disciplined capital allocation framework,” the company said.
Last week the gold miner announced it will cut $2 billion from its capex and costs across the organisation, reiterating it will be implementing budget discipline, focussing on investor returns, and is planning further portfolio optimisation.
It also earmarked its WA Plutonic gold mine for potential divestment, warning “returns will drive production; production will not drive returns”.