Barrick Gold explores sale of 74 per cent Africa shares.

By Editor – 20/08/12 Owners of Zambia's Lumwana Mine Barrick Gold, the Canadian mining group, confirmed last week Thursday it is in discussions to sell a 74 per cent stake in African Barrick Gold to a Chinese company. Toronto-based Barrick said talks were under way with China National Gold Group Corporation, a Beijing based mining group, but that they were at a preliminary stage. However, one person with knowledge of the discussions has told the Financial Times that Zijin Mining Group, the Chinese copper and gold miner, had also indicated a preliminary interest in African Barrick. According to people familiar with the matter, Barrick has been working with UBS to consider its options for African Barrick, which the Canadian miner, the largest gold producer globally, partially floated in 2010. China Gold, which has subsidiaries listed in Hong Kong and Toronto and on Beijing’s A share market, is the biggest producer of gold in China and in 2007 set a target to quadruple assets and revenues within four years. African Barrick, Tanzania’s largest gold producer, has performed poorly since being spun off from its Canadian parent in 2010, with its shares slumping about 30 per cent since listing. An offer for Barrick’s stake in African Barrick could trigger an offer for the whole of the London-listed company, people familiar with the matter said, putting the onus on its independent directors to safeguard minority owners’ interests. The UK-listed miner’s shares surged more than 11 per cent to 437.6p in early trading on Thursday. The Financial Times says Barrick Gold recently signalled it was reining in its expansion plans and introducing a renewed focus on disciplined spending, as it announced a big cost over-run at its key development project in South America. Jamie Sokalsky, the new Barrick chief executive, pledged that “returns will drive production; production will not drive returns” as he unveiled a review of the miner’s sprawling portfolio of assets. The Chinese group has, thus far, had a limited profile on the world stage. In August, Zijin said it had bought more than 50 per cent of Norton Gold Fields, an Australian company, calling the move “the first successful example for Chinese enterprise to take over large-sized gold mine in production”….FT