Barrick Mining Corp. ABX-T has chosen the United States over Canada for its primary stock listing for its upcoming North American spin off.
Later this year, Barrick plans to spin off between a 10-to-15-per-cent stake in its North American mines, including its promising Fourmile discovery in Nevada.
In a press release on Tuesday the company said that North American Barrick is expected to have its primary listing in New York, with a secondary listing in Toronto.
It is unclear where North American Barrick will be domiciled.
George Joannou, chief development officer with Barrick, declined to comment.
Should it choose to incorporate North American Barrick in the U.S., there is a possibility the spinout could still qualify for inclusion in Canada’s major stock market indexes.
S&P Dow Jones Indices earlier this month said it is considering foreign companies for inclusion in major Canadian indexes, as long as they are listed in Canada, and meet criteria around liquidity and size. Under the current rules, companies have to be domiciled and incorporated in Canada to be included in the index.
Canada’s second-biggest gold company on Tuesday also announced a standalone executive team for North American Barrick with Tim Cribb named as chief operating officer and Wessel Hamman named as chief financial officer.
Barrick has long traded at a discount to peers such as Agnico Eagle Mines Ltd. AEM-T in part because of its heavy exposure to risky jurisdictions such as Africa, the Middle East, Pakistan and Papua New Guinea. By providing a vehicle for investors to gain exposure only to its North American operations, Barrick is betting that will result in a “rerate” of its stock.
While the geopolitical risk is significantly lower in North America, the operational performance of Barrick’s North American assets has been disappointing in recent years with both higher costs and lower output than predicted.
Barrick in its Tuesday statement said it has been meeting with its joint venture partner Newmont Corp. NEM-N to look at ways to improve performance at the operations as well as discussing the proposed spinout.
In a February report, RBC Dominion Securities analyst Josh Wolfson said the proposed timeline of the spinout could be at risk, should Newmont dispute the process under the JV agreement.
Barrick on Tuesday allayed some of those fears, saying in its statement that it “is free to pursue the IPO unilaterally.”
Mr. Wolfson in a report on Tuesday said a collaborative approach with Newmont could enable Barrick to advance the IPO on schedule.