Moody's ups Barrick view to stable

Moody's Investors Service said it revised the outlook for the ratings of Barrick Gold Corp., Barrick Gold Finance Co. and Barrick Gold Inc. to stable from negative. The agency also affirmed the companies' Baa1 senior unsecured debt ratings.

The outlook revision follows Barrick's announcement that it has agreed to sell its 50% interest in South Deep for $1.525 billion in cash and shares. In July, Barrick announced an unsolicited bid to acquire up to 100% of the shares of NovaGold Resources Inc. for $1.6 billion in cash, including the exercise of warrants and a smaller acquisition. Barrick had said that it would fund the acquisition of NovaGold significantly with debt, but is now positioned to finance the NovaGold acquisition with proceeds from the sale of South Deep. Both transactions are expected to close in late 2005 or early 2006.

Moody's said the affirmation of the Baa1 senior unsecured debt ratings reflect the strong cash flow being generated by Barrick in the currently robust gold and copper markets, its cash position of $1.4 billion at June 30, its favorable cost position, the scale and diversity of its production profile and its reserve position in gold, and, with the Placer Dome and proposed NovaGold acquisitions, its increasing production and reserve position in copper.

The ratings also consider operating and development cost pressures facing the mining industry generally, risks associated with ongoing development of new mines, operating and geological risks inherent to the mining industry and political risk inherent in operations outside of North America and Australia, the agency said.

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