Bloomberg News

Barrick Plans to Sell Stake in Abramovich’s Russian Gold Venture

February 14, 2012

Feb. 13 (Bloomberg) -- Barrick Gold Corp., the world’s largest producer, plans to sell its 20 percent stake in Highland Gold Mining Ltd., the Russian miner part-owned by billionaire Roman Abramovich’s Millhouse Capital, after output stagnated.

The Canadian company intends to divest its stake in Highland Gold after deciding that it’s “non-core to Barrick’s business operations and strategy,” the London-listed miner said in a statement today. Highland fell the most in six months.

Millhouse controls 40 percent of Highland Gold, including shares owned by Abramovich’s partner Eugene Shvidler, and is “happy” with this stake, spokesman John Mann said in e-mailed comments. Millhouse doesn’t rule out buying Toronto-based Barrick’s stake in the company, he said.

“Barrick, which bought into Highland Gold in 2003, initially sought to use the company as a platform for expansion in Russia,” said Nikolay Sosnovskiy, an analyst at VTB Capital in Moscow. “Highland failed to increase production, and now Barrick is basically quitting Russia.”

Highland produced 184,102 ounces of gold equivalent last year, compared with 199,896 ounces in 2004, according to the company’s regulatory filings.

Highland dropped 9.5 percent to 154 pence in London trading at 9:09 a.m., the largest intraday slump since Aug. 8, valuing Barrick’s 20.4 percent at about 106 million pounds ($170 million).

--Editors: John Viljoen, Ana Monteiro

To contact the reporter on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net


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