Mining major Barrick Gold, nearing a deal for its Zaldivar copper mine, is likely to consider three other mines as leading candidates for sale as it works to cut the biggest debt in the gold industry.

Among the remaining noncore mining operations that Barrick would examine selling are its 50% stake in Australia’s Kalgoorlie mine, Canada’s Hemlo and Bald Mountain, in Nevada, according to analysts and investment bankers.

The world’s largest producer of the metal has pledged to raise at least $3-billion this year to reduce its $12.9-billion debt. The Toronto-based company is in advanced discussions to sell a 50% stake in its Zaldivar mine, in Chile, with final bids submitted earlier by China Molybdenum, BHP Billiton and others.

While Barrick has said it only wants to sell a 50% stake in the mine, some of the bidders are expected to have submitted bids for the whole operation, which is valued at more than $2-billion.

If completed, Zaldivar would mark the last of three deals Barrick has pledged to complete this year. In May, the company sold a 50% stake in its Porgera mine, in Papua New Guinea, to Zijin Mining Group for $298-million. That came two days after it had agreed to sell its Australian Cowal mine to Evolution Mining for $550-million.

Excluding Zaldivar, the company has made more than $2-billion in deals since its total debt peaked at $15.8-billion in 2013, the same year gold futures had their biggest annual plunge in more than three decades. The debt had ballooned after Barrick’s takeover of copper miner Equinox Minerals in 2011.

Reducing debt will remain a priority after the Zaldivar sale, says spokesperson Andy Lloyd.

“Prudent financial management was a bedrock principle of the company and our current level of debt is inconsistent with that principle,” Lloyd says. “No priority is more important than restoring a strong balance sheet.”

Barrick’s credit rating has been slipping at Standard & Poor’s since 2006 and was downgraded to BBB– in March, the lowest investment grade. For years, Barrick had the only A-rated balance sheet in the gold industry.

The company’s shares, which fell 1% to C$12.47 yesterday in Toronto, have dropped more than 75% in Toronto since Sept. 6, 2011, when gold hit a record intraday high in New York. Gold prices have plunged about 40% since then.

Barrick has said five mines are off the table for sale: Cortez and Goldstrike, in Nevada, its 60% stake in Pueblo Viejo, in the Dominican Republic, Lagunas Norte, in Peru, and Valadero, in Argentina. The company views its Turquoise Ridge mine, in Nevada, as an “emerging core” asset and, therefore, also not an attractive sales option.

Of those remaining, the Kalgoorlie mine – a 50:50 joint venture with Newmont Mining – is a noncore gold asset that would be relatively easy to divest, according to Ron Stewart, a Toronto-based analyst at Macquarie Capital Markets.

“I could see Newmont wanting to consolidate 100% of that, and that would get Barrick out of Australia altogether.”

The Hemlo mine also bears similarities to Cowal, according to HSBC Securities USA’s Patrick Chidley.

“You’ve got a Canadian mine whose costs are coming down as a result of the Canadian dollar weakening, and you’ve got demand for supposedly low-risk mines in jurisdictions like Canada and Australia,” says Chidley. “I would say if Barrick put that on the market, there would be quite a few bidders.”

Stewart says a sale of Hemlo may be less likely, given the tax efficiencies that come from having mining income in Canada, where Barrick’s head office is located.

There are also a number of noncore US mining assets that Barrick might want to sell. Of these, Montana’s Golden Sunlight is nearing the end of its life and would likely be difficult to sell, analysts say.

The company’s noncore gold assets in Nevada also may be sold as a package, according to Andrew Kaip, an analyst at BMO Capital Markets, in Toronto. Bald Mountain is seen to be the strongest and might be used to entice buyers to buy the weaker Ruby Hill and Round Mountain mines.

Equity Raise?

“They can put together all of those assets as an emerging, Nevada-focused gold company and somebody’s going to take it off their hands,” Kaip says.

Other avenues Barrick may consider to raise funds include share sales, selling so-called streaming rights to future production, or having an investor take a minority stake in the company and get a portfolio of joint ventures alongside that investment, bankers have said.

Barrick’s ratio of total debt to earnings before interest, depreciation and amortisation sits at 3.4, according to Bloomberg estimates, and S&P said in March it expected debt to remain at more than three times earnings before interest, taxes, depreciation and armotisation (Ebitda) to 2016.

If Barrick wanted to return to an A credit rating, it would have to reduce its total debt-to-Ebitsa ratio by half to roughly 1.7 times, the median level of its peers at that rating, according to Bloomberg Intelligence credit median analysis.

It is unlikely Barrick will see much of an improvement in its credit rating until gold prices recover, says Richard Bourke, a BI senior credit analyst. Selling equity is not very attractive at this point, given its share price.

“I don’t think you can sell your way to a higher rating,” Bourke says of Barrick’s asset sales. “They really need gold prices to recover to get them there.”