Barrick Plans Spinoff of Nevada Gold Mines Interests
American Barrick Gold Corporation intends to apply to list its common stock on the NYSE under ABGC after an internal reorganization of its North American gold operations.
American Barrick Gold Corporation is preparing to receive Barrick’s joint-venture interests in Nevada Gold Mines and Pueblo Viejo, along with certain related assets and liabilities, as a standalone public company. In connection with a proposed common-stock offering, Barrick will complete an internal reorganization under which the new issuer will own, directly or indirectly, Barrick’s joint-venture interests in Nevada Gold Mines (including Fourmile) and Pueblo Viejo, together with certain other assets and liabilities tied to Barrick’s North American operations. Barrick’s remaining assets and liabilities will stay with Barrick.
The company said it intends to apply to list common stock on the NYSE under the symbol “ABGC.” Upon completion of the offering, Barrick is expected to hold a majority of the new company’s common stock and, while it beneficially owns a majority of voting power, to be able to control outcomes on matters submitted to stockholders, including election of directors. Barrick will also be able to designate a majority of the board and of each board committee for so long as it owns a majority of outstanding shares, plus special rights under a Relationship Agreement, though it will not have day-to-day decision-making authority.
As part of the reorganization, the new company will issue Barrick a promissory note as a dividend immediately before the offering to facilitate a return of capital, and it intends to use a portion of net proceeds to repay that note, with the remainder for general corporate purposes. After the separation, the company said it will continue to be an obligor for currently outstanding subsidiary debt and expects to enter a new revolving credit facility at closing.
The company and Barrick said the separation is intended to improve strategic and operational flexibility, sharpen management focus, let each company adopt a capital structure, investment policy and dividend policy suited to its own profile, and give each its own equity for acquisitions and management incentives. The new company will adopt a dividend policy approved by Barrick, under which it expects an annualized base dividend paid quarterly, plus special dividends of free cash flow above a target net cash position after reinvestment in Tier One assets and growth opportunities. The policy may not be amended without Barrick’s written consent while Barrick owns a substantial minority of outstanding shares.