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Barrick says high gold price could eliminate debt within decade, flags asset sales

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Barrick says high gold price could eliminate debt within decade, flags asset sales

The recent surge in the price of gold, combined with costcutting and asset sales, could eliminate Barrick Gold Corp.'s debt within a decade, PresidentKelvin Dushnisky said in an interview with Bloomberg published July 8.

The Canadian miner, the world's largest gold producer, hadtotal debt of US$9.12 billion at the end of March, down from a peak of US$15.80billion in 2013, according to data from S&P Capital IQ.

In an interview with Bloomberg TV Canada, Dushnisky said apart of the debt reduction would come from noncore asset sales, including its50% stake in two copper mines — Zaldivar in Chile and Lumwanain Zambia.  

He said the company is also likely to consider selling its50% stake in the Kalgoorlie Super Pit, a joint venture with

"It's a great asset. Newmont would be a natural buyergiven that they're a 50-50 partner. Like all our noncore assets, there will bea point in time when it makes sense to divest. … But we're not in discussionsat the moment."

Newmont CEO Gary Goldberg recently confirmed that thecompany was still interested in buying out Barrick.

The Canadian gold company may also become a buyer if the "rightopportunity" presents itself, Dushnisky said. The right opportunity wouldinclude mines that have internal rates of return above 15% at US$1,200 perounce and generate positive cash flow at US$700 per ounce.

"There's nothing on ourradar screen now and we'll be very patient."

He noted that any acquisitionwould likely be funded with equity and that more than likely the deal would befor an asset located in the Americas.

Barrick in 2015 exceeded its goal of paying down US$3billion in debt, and it might beat its 2016 goal of cutting a further US$2billion if gold prices hold up.