English | دری

China National Gold to buy a stake in African Barrick Gold

in International Business

China National Gold to buy a stake in African Barrick Gold

As demand for gold in China is surging, China’s state-owned miner, China National Gold, is in talks with African Barrick Gold (ABG) to buy a big chunk of African assets.

The deal could fetch as much as about USD 3.9 billion to ABG- one of Africa’s largest gold miners- in a bid to boost its shareholder value.

The production of the firm has been declining in recent due to several factors.

Last year, the company produced almost 688,000 ounces of gold. That was down from 701,000 ounces in 2010 and 716,000 ounces the year before.

Several factors have caused the poor production of the firm.

The cost of production went up by more than 20% in 2011 from last year. It has also been hurt by issues such as power cuts as well as theft of fuel.

According to Hunter Hillcoat an analyst with Investec, despite its high risks, the firm looks valuable to get a reasonable set of assets for a good price.

While some analysts find investment in ABG not very fruitful.

“They’ve made a massive loss on these investments, so if the Chinese came in with a massive offer I think they’d bite their hand off,” said Cailey Barker, a mining analyst at Numis Securities.


Tags assigned to this article:
African Barrick GoldChina national gold

Related Articles

G7 to hold emergency eurozone talks

Ministers and central bankers to hold a special conference call, raising pressure on the Europeans to act. Finance chiefs of

7.5 million Youths unemployed around the world

The global economic crisis has hit the younger generation severely, leaving 7.5 million unemployed. This tends to darken the outlook

US Congress backs payroll tax cut

The US Congress has voted in favour of extending a payroll tax cut until the end of 2012, ending months

No comments

Write a comment
No Comments Yet! You can be first to comment this post!

Write a Comment

Your e-mail address will not be published.
Required fields are marked*

Time limit is exhausted. Please reload the CAPTCHA.