Boston, MA 04/09/2014 (wallstreetpr) – Barrick Gold Corporation (USA) (NYSE:ABX) is currently in restructuring mode. The low prices and demand for the yellow metal, of which the company is a leading producer. The company is turning to restructure to ensure that it remains firm in business while delivering greater value for its shareholders.
More specificity, the company is after reducing operating costs and debts. Therefore, the company can be seen disposing of some assets that are of high operating cost. In so doing, the company is not only aiming to improve its earnings, but also reduce debt burden involved in operating the underperforming businesses.
In addition to existing high-cost operations, the company also recently adjusted executive pay package, which saw its chairman John Thornton taking a significant pay cut.
Sale of Marigold mine stake
Since February, Barrick Gold Corporation (USA) (NYSE:ABX) made clear its plans to sell a stake in Marigold mine. The company jointly owned Nevada-based business with Goldcorp Inc (USA) (NYSE:GG). Barrick held a minority stake in the business at 33.3 percent, while Goldcorp that managed the operations owned 67.3 percent stake.
In exiting the Marigold mine venture, Barrick sold its stake to Silver Standard Resources Inc (USA) (NASDAQ:SSRI). The transaction that closed this week was valued at $86 million. Goldcorp is also expected to sell its entire stake in the business.
Cash flexibility
By selling its Marigold stake, Barrick Gold Corporation (USA) (NYSE:ABX) managed to secure important cash boost. The cash is expected to go into strengthening of operations towards achieving growth and better earnings.
The company’s most recently reported quarter was weak compared with a similar quarter one year ago. Earnings came in at $0.37 per share, against $1.16 per share a year ago. Revenue dropped nearly 30 percent from the year ago figure.
New executive compensation
Following shareholder uproar over huge executive compensation and small return on investment, the company announced a new compensation scheme and salary cut for Chairman Mr. Thornton. The chairman will take home $9.5 million, down from $17 million in the prior year.
