Barrick takes full control at Cortez

Barrick Gold has completed its acquisition of the additional 40% interest in the Cortez property in the USA from Kennecott Explorations (Australia), a subsidiary of Rio Tinto, for a total cash consideration of $1.695 billion. The transaction was previously announced on February 21, 2008 when the parties entered into a definitive purchase and sale agreement. Barrick has been entitled to the production and economic benefit of 100% of the property from March 1, 2008.

The acquisition will increase Barrick’s share of Proven and Probable reserves by 4.6 Moz to 11.5 Moz (100% basis) and Measured and Indicated mineral resources by 1.4 Moz to 3.5 Moz (100% basis). The Cortez mine is already a significant contributor to Barrick’s quality Nevada production base. When the Cortez Hills project is commissioned, production from the Cortez property is expected to increase to 950,000 – 1,000,000 oz/y of gold (100% basis) at total cash costs of $280-$290/oz in the first full five years of production.

Rio Tinto notes that this sale is parft of its planned program to divest at least $15 billion of assets. “Rio Tinto has also announced the sale of Greens Creek silver, gold, zinc and lead mine in Alaska for $750 million, meaning the Group is on track to achieve almost one quarter of its target of realising asset sales of $10 billion in 2008.”

In November 2007, Rio announced the results of its overall strategic review of the asset portfolio following its acquisition of Alcan. Options are also being explored to divest Rio Tinto Energy America (coal), Rio Tinto Minerals’ talc business and borates business, Rio Tinto Alcan Packaging, Rio Tinto Alcan Engineered Products, Rio Tinto’s interest in the Northparkes copper mine in Australia and Rio Tinto’s Sweetwater (USA) and Kintyre (Australia) uranium assets.