Barrick Gold Corporation (ABX) declared that it has closed its earlier announced bought deal equity offering. The company has sold 163.5 million common shares at $18.35 per share for net proceeds of roughly $2.9 billion. Consequently, its common shares outstanding have risen to roughly 1.16 billion.
Barrick plans to use around $2.6 billion of the offering’s net proceeds to redeem or repurchase its outstanding debt, mostly focused on debts maturing in the short and medium term. The company plans to use around $1.1 billion of the net proceeds of the offering to redeem the outstanding $700 million aggregate principal amount of 1.75% notes due 2014, as well as the $350 million aggregate principal amount of 4.875% notes due 2014. The notes will be redeemed on Dec 16, 2013, in accordance with their terms.
Further, Barrick intends to use about $1.5 billion of these net proceeds to purchase other notes pursuant to its tender offer announced on Oct 31, 2013. The balance net proceeds will be utilized to strengthen the company’s balance sheet and for general corporate purposes, including its current operating and capital expenditures related to an existing portfolio of mines.
Barrick released its third-quarter 2013 financial results on Oct 31. The company’s cash and cash equivalents stood at $2,283 million as of Sep 30, 2013, down roughly 10% from $2,530 million as of Sep 30, 2012. Total debt was $15.4 billion, up around 11% from $13.9 billion a year ago. Adjusted operating cash flow was $1.3 billion versus $1.4 billion in the prior-year quarter.
Barrick currently carries a Zacks Rank #3 (Hold).
Other companies in the mining industry with a favorable Zacks Rank are Franco-Nevada Corporation (FNV), Pretium Resources Inc. (PVG) and Lake Shore Gold Corp. (LSG). While both Franco-Nevada and Pretium Resources carry a Zacks Rank #1 (Strong Buy), Lake Shore Gold holds a Zacks Rank #2 (Buy).