The Financial Post reports in its Thursday edition that Barrick Gold's sudden expansionist desires are driven by the same concerns as the rest of the industry -- it is getting harder to find gold and more expensive to mine it. The Post's Gabriel Friedman writes that is the view of John McCluskey, chief executive officer of Alamos Gold.
Barrick is pursuing a $17.8-billion (U.S.) hostile bid for Newmont Mining in a deal that would combine the two largest gold companies into a firm of unparalleled size.
Mr.
McCluskey said he thinks that Barrick, and its new chief executive officer Mark Bristow, are concerned about the company's gold reserves and wants to increase its size so that it can comfortably sell off less-impressive mines without cutting its profitability.
"They're trying to essentially get enough critical mass so they can afford to divest what they know in their portfolio are non-core assets," said Mr. McCluskey.
"It doesn't help Mark Bristow's case when he describes those non-core assets as second-tier or garbage because then the companies he's hoping will buy those, they have to turn around to their investors and explain why they want to buy garbage," he said, adding that he admires the Barrick CEO.
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