DBRS Places Barrick Gold Corporation Under Review with Developing Implications Following Announcement of Potential Randgold Merger

DBRS Limited (DBRS) placed the BBB (low) Issuer Rating of Barrick Gold Corporation (Barrick or the Company), formerly with a Positive trend, Under Review with Developing Implications. The rating action follows Barrick’s September 24, 2018, announcement of a share-for-share merger with Randgold Resources Ltd. (Randgold) in an all-equity transaction valued at approximately $5.4 billion. Randgold is an Africa-focused gold producer with operating mines in Mali, Senegal, Côte d’Ivoire and the Democratic Republic of Congo that produced approximately 1.3 million ounces of gold in 2017.

DBRS notes that as at June 30, 2018, Randgold reported loans from minority shareholders totalling $2.8 million with no term debt and was significantly net cash positive. DBRS also notes that the proposed all-equity transaction should be credit positive for Barrick’s debt-to-capital metric; however, Randgold’s operations are in Africa, increasing Barrick’s political risk. The proposed transaction is subject to approval by both Barrick and Randgold shareholders, regulatory approvals and other customary closing conditions. Management expects the transaction to close in Q1 2019.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is Rating Companies in the Mining Industry (September 2018), which can be found on dbrs.com under Methodologies.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at info@dbrs.com.

The rated entity or its related entities did not participate in the rating process for this rating action. DBRS did not have access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

This is an unsolicited credit rating.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.