Barrick Gold does not intend to grow through merger and acquisition activities as it prefers to grow organically while targeting sustainable profitable growth.
Company chief executive Mark Bristow’s comments follow reports that Newmont, a rival gold mining group, had launched a $16.9 billion non-binding merger proposal to take over Newcrest, an Australian major gold producer.
“We are looking at M&A possibilities all the time, but we are very mindful of the risks. When you are doing mergers of ageing assets you have to be mindful of what you are buying,” he said. Then you have to be clear on whether you are doing this just to be bigger or are you doing it for real value,” he said.
Bristow, who made a presentation at the Mining Indaba in Cape Town, showed his disdain for mergers and acquisitions.
“We did not get caught up in these $1,900/oz deals. We have just been rated A3 with a stable outlook by Moody’s which is the highest rating in the sector,” he said.
“That upgrade reflects the enormous progress we have made in strengthening our balance sheet and managing our capital structure over the past three years. We also have a better asset profile today than we had four years ago.”
Bristow said Barrick is replacing the ounces it mines.
“When you are not replacing the ounces, you mine you have to keep buying regardless because otherwise, you run out. Look at what happened to Gold Fields. What drove Gold Fields to do that stupid Yamana deal was it suddenly woke up to the fact it had a cliff in front of it,” he said.
“That deal was not well considered at all. It made a lot more sense for Yamana than for Gold Fields. A merger between Gold Fields and AngloGold would be a far better and more logical option for Gold Fields.”
Mathew Nyaungwa, Editor in Chief of the African Bureau, from Cape Town, South Africa, Rough&Polished
Company chief executive Mark Bristow’s comments follow reports that Newmont, a rival gold mining group, had launched a $16.9 billion non-binding merger proposal to take over Newcrest, an Australian major gold producer.
“We are looking at M&A possibilities all the time, but we are very mindful of the risks. When you are doing mergers of ageing assets you have to be mindful of what you are buying,” he said. Then you have to be clear on whether you are doing this just to be bigger or are you doing it for real value,” he said.
Bristow, who made a presentation at the Mining Indaba in Cape Town, showed his disdain for mergers and acquisitions.
“We did not get caught up in these $1,900/oz deals. We have just been rated A3 with a stable outlook by Moody’s which is the highest rating in the sector,” he said.
“That upgrade reflects the enormous progress we have made in strengthening our balance sheet and managing our capital structure over the past three years. We also have a better asset profile today than we had four years ago.”
Bristow said Barrick is replacing the ounces it mines.
“When you are not replacing the ounces, you mine you have to keep buying regardless because otherwise, you run out. Look at what happened to Gold Fields. What drove Gold Fields to do that stupid Yamana deal was it suddenly woke up to the fact it had a cliff in front of it,” he said.
“That deal was not well considered at all. It made a lot more sense for Yamana than for Gold Fields. A merger between Gold Fields and AngloGold would be a far better and more logical option for Gold Fields.”
Mathew Nyaungwa, Editor in Chief of the African Bureau, from Cape Town, South Africa, Rough&Polished
