Barrick Mining Corporation has reached a definitive agreement to sell the Hemlo Gold Mine on the north shore of Lake Superior to Carcetti Capital Corp., a Vancouver investment firm, for proceeds of up to US$1.09 billion.
The transaction, which includes $875 million in cash along with $50 million worth of shares in Carcetti, is expected to close by the fourth quarter of this year. Carcetti will be renamed Hemlo Mining Corp.
Hemlo is Toronto-headquartered Barrick’s last Canadian mine.
Barrick placed the legendary northwestern Ontario mine up for sale last April, categorizing it as a non-core asset. The underground mine is located just off the Trans-Canada Highway, 35 kilometres east of Marathon.
In a news release, Barrick said the proceeds from the sale will be used to strengthen its balance sheet and support its commitment to return capital to shareholders.
“The sale of Hemlo at an attractive valuation marks the close of Barrick’s long and successful chapter at the mine and underscores our disciplined focus on building value through our Tier One gold and copper portfolio,” said Barrick president and chief executive Mark Bristow in a statement.
Jason Kosec, incoming president-CEO of Hemlo Mining, said the acquisition “establishes the foundation for the next leading mid-tier Canadian growth-focused gold producer.”
“Our business objective is clear: to maximize the value of Hemlo’s existing infrastructure through a fit-for-purpose operating approach, while unlocking new opportunities through an aggressive brownfields exploration strategy.”
Kosec said his company is looking forward to working with area First Nations.
“We extend our appreciation to Barrick for their longstanding stewardship of this asset and look forward to working in close partnership with the Biigtigong Nishnaabeg and Netmizaaggamig Nishnaabeg First Nations, as well as the local community, to ensure Hemlo continues to generate shared benefits for years to come. Together, we are committed to extending Hemlo’s proud legacy and creating meaningful, long-term value.”
Over its more than 30-year operating life, Hemlo has produced more than 21 million ounces of gold. Last year, Hemlo produced 143,000 ounces, about 3.45 per cent of the company’s total output.
Barrick has been reducing its North American presence and has been shedding assets since its merger with African-focussed Randgold Resources, which was founded by current Barrick president-CEO Mark Bristow.
The international miner, which recently changed its name from Barrick Gold to Barrick Mining, is out to expand its copper business with mines in Saudi Arabia and Zambia and another one under construction in Pakistan.
This move comes just days after Vancouver’s Tech Resources agreed to merge with Britain’s Anglo American to create a new company, Anglo Teck.
Last year, another major gold company, Denver-based Newmont, divested certain gold assets in Northern Ontario it also deemed non-core. That culminated in the sale of the Musselwhite Mine in northwestern Ontario to Orla Mining and the Porcupine complex in Timmins and the Borden Mine, outside Chapleau, to Discovery Silver earlier this year.
