Barrick sells Cowal mine to Evolution Mining for $550 million

Cowal gold mine in Australia’s New South Wales. (Image courtesy of Barrick Gold)

Canada’s Barrick Gold’s (TSX, NYSE:ABX), the world’s No.1 producer of the precious metal, is selling its Cowal gold mine to Evolution Mining (ASX:CAH) for $550 million in a deal that will turn Evolution into Australia’s second largest gold producer.

Barrick put Cowal up for sale along with its Porgera mine in Papua New Guinea, among other assets, in an effort to cut debt by $3 billion by the end of this year.

In addition to these assets, the miner has been looking for buyers for a stake in the Zaldivar copper mine in Chile and it is also said to be considering the sale of a nickel project it co-owns with Glencore (LON:GLEN).

“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,” said Barrick Co-President Kelvin Dushnisky in a statement.

This is the forth mine Barrick, which had about $13 billion in debt at the end of 2014, sells in Australia.

With the acquisition, expected to be completed before October, Evolution’s production will overtake fellow Australian gold miner Northern Star Resource (ASX:NST), which grew rapidly last year after buying four gold mines from Barrick and Newmont Mining (NYSE:NEM) for less than $200 million.