TORONTO – Shares of Barrick Gold continued to fall Friday in the wake of a massive US$3-billion financing deal by the gold miner.
The Toronto-based company announced the plan late Thursday after saying it would suspend work at its Pascua-Lama gold project in South America.
Barrick has signed a deal with a syndicate of underwriters to issue as many as 188 million shares at a price of US$18.35 per share.
After deducting underwriting commissions, Barrick will receive about US$2.9 billion or as much as US$3.3 billion if over-allotment options are fully exercised.
The company said it will use the cash raised to pay down debt and bolster its balance sheet.
Barrick shares were down $1.47 or 7.3 per cent at C$18.81 on the Toronto Stock Exchange. The shares have lost more than 45 per cent so far this year.
On Thursday, Barrick suspended work at its Pascua-Lama project in the face of lower gold prices and other problems at the mine under construction in the Andes mountains.
With nearly 18 million ounces of proven and probable gold reserves and 676 million ounces of silver, the project is one of the largest deposits in the world.
When Barrick first gave the project the green light in 2009, it was expected to cost US$2.8 billion to US$3 billion to build with commissioning to begin in late 2012 and production in early 2013.
However, project costs have ballooned to more than US$8 billion as it has also been hit by several delays.