Barrick Gold has signed an agreement to sell its Cowal gold mine in New South Wales, Australia, to Evolution Mining in a deal worth $550m.
The company plans to use proceeds from the sale of Cowal gold mine in New South Wales to reduce debt by $3bn.
Barrick is set to close its office in Perth, Australia, and said that the divestment will also contribute to trim costs that are associated with this development.
Barrick Gold co-president Kelvin Dushnisky said: "The sale of Cowal is consistent with the strategy we have outlined to create long-term value for our owners, making a significant contribution to our debt reduction target, while further focusing the geographic footprint of our portfolio.
"We are pleased to have achieved a successful outcome following a competitive auction process in the first of several asset sales now underway."
The Cowal gold mine has an estimated annual production of 230,000oz-260,000oz at an all-in sustaining cost (AISC) of A$850-A$900 per ounce, and is set to substantially reduce Evolution’s cost profile.
Upon closing the transaction, the company will have combined current annual production of 630,000oz-700,000oz.
The company plans to raise about A$248m ($194m) through a fully underwritten pro-rata accelerated renounceable entitlement offer to partly fund the transaction.
Furthermore, the balance will be funded by refinanced corporate credit facilities comprising an upsized A$300m ($234m) senior secured revolver and a new A$400m ($312m) senior secured term loan.
Located 40km north-east of West Wyalong, Cowal is a high-quality Australian gold asset and production at the mine is currently sourced from a single open-pit by employing conventional drill and blast, load and haul mining methods.