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Barrick Gold’s Bulyanhulu mine in northwest Tanzania, in the Kahama district of the Shinyanga region, is about 55 kilometres south of Lake Victoria.

Barrcik Gold

Barrick Gold Corp. announced plans on Monday to sell 13.5 per cent of its stake in African Barrick Gold PLC, another step in the Canadian company's plan to streamline its business amid weaker bullion prices.

Toronto-based Barrick had unsuccessfully tried to sell African Barrick to state-owned China National Gold Group Corp. in 2012 when the price of gold started to slump, but that deal fell apart last January.

The sale of about 41 million African Barrick shares to institutional investors will reduce the company's position in the African miner to roughly 60 per cent from its current 74 per cent.

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The fact that Barrick decided to unload a small stake is a sign of how difficult it has been for companies to find the right price for their unwanted mines during the commodity downturn.

Barrick, the world's biggest gold producer, has been divesting non-core resources and retooling mines that cost more than $1,100 (U.S.) to produce an ounce of gold.

With African Barrick spending an average of $1,362 to produce an ounce of gold last year, it has been a prime target for divestiture. Barrick's average production cost last year was $915 an ounce.

To date, the miner has sold nearly $1-billion worth of assets, including mines in Australia and Nevada, as well as its energy business. Barrick's Tanzanian mines are more expensive to operate and that was one of the reasons Barrick spun out its African assets into a separate unit in 2010.

The announced sale comes as former Goldman Sachs executive John Thornton prepares to take over as Barrick's chairman when the company holds its annual shareholder meeting in the spring.

Mr. Thornton, who was recruited for his business acumen and network of contacts in China, has been criticized by some shareholders for not sealing the African Barrick deal with the Chinese.

The share offering was launched Monday afternoon and is being run by UBS Ltd., JP Morgan Securities and Royal Bank of Canada. The pricing was not disclosed.

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It is unlikely that China National would try to buy African Barrick again and it is unclear whether a single buyer will emerge for Barrick's remaining stake in African Barrick.

The Toronto-based company would reap about $205-million from the sale based on African Barrick's last trading price in London. At one point, the sale of African Barrick was expected to fetch about $2.5-billion.

A Barrick spokesman would not comment on what the company planned to do with the proceeds.

Last year, Barrick used the bulk of its massive $3-billion equity offering to pay down some of the debt incurred when it bought copper company Equinox Minerals Ltd.

Although mining companies, including African Barrick and Barrick, are enjoying a rebound in their stocks, most are still trading at multi-year lows.

That has led to a huge price disparity between where companies are willing to sell their assets and what buyers are willing to pay.

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