Barrick Gold Corp announced on Wednesday it plans to reduce its net debt by more than $3 billion by the of this year, party by disposing of two of its mines.
The worlds largest gold producer said it intends to start a process to sell its Cowal mine in Australia and the Porgera joint-venture between the Papua New Guinea government and a subsidiary of Barrick, which owns 95% of the mine operations.
Additionally, the company plans to reduce the number of employees working at its Toronto head office by 120 to 140 in 2015, with the aim to cut corporate administration expense in the year ahead and the next one.
Under its efforts to reduce its net debt the company said it would delay, drop or dispose of projects that to not deliver at least 15% of the invested capital. Barrick also said it would “apply more rigor” in monitoring execution in its operation to ensure cost targets are met.
The companys “Back to the Future” plan also aims at maximizing free cash flow by implementing a leaner, decentralized operating model that reflects Barricks original culture. The company also said it would look to form strategic partnerships and joint-ventures “if and where they make sense”.
The announcement marks the first time that Executive Chairman John Thornton has shared his plans since he took over the company in April, answering shareholders calls for a clear vision of his intentions.
Following the retirement of the companys founder Peter Munk, Mr. Thornton has shaken up management. Chef Executive Jamie Sokalsky stepped down and his duties were passed down to two co-presidents.
Additionally, Mr. Thornton scrapped the entire corporate development team, which was responsible for finding and evaluating assets worth purchasing.
Barrick also reported a net loss of $2.85 billion, $2.45 per share, in the three months ended December, compared to a net loss of $2.83 billion, $2.61 per share, stated in the fourth quarter of 2013.
The company said performance was hit by $2.8 billion in after-tax impairment charges, including impairments related to its Cerro Casale mine in Zambia and Lumwana project in Chile.
Excluding certain items, earnings stood at $174 million, or $0.15 a share, versus $406 million, or $0.37 a share in the previous year but $0.02 higher than the average estimate by analysts surveyed by Thomson Reuters.
Barrick gained 2.29% on Wednesday and closed at C$15.21, marking a one-year decrease of 31.79%. The company is valued at C$17.21 billion.
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