Barrick Gold Corp.
, Stock Forum
) has launched a $3 billion bought deal equity offering that will be used to reduce debt.
Under an agreement with a syndicate of underwriters led by RBC Capital Markets, Barclays and GMP Securities, the offering is comprised of 163.5 million shares, priced at $18.35.
Barrick also said the underwriters have been granted an over-allotment option, enabling them to purchase up to an additional 24.5 million shares that could raise the total gross proceeds to $3.45 billion.
The net proceeds from the offering will be approximately $2.9 billion, the company said in a press release.
The company said it intends to use roughly $1.1 billion of the net proceeds of the offering to redeem the outstanding $700 million worth of 1.75% notes due 2014 and a further $350 million in 4.875% notes, also due on 2014.
Barrick shares dropped 6% to $20.27 Thursday after the Canadian gold mining giant said it will suspend construction at its troubled Pascua-Lama mine in Chile as it moves to reign in costs and roll the project out more efficiently.
That leaves the company with a market cap of $20.3 billion, based on over $1 billion shares outstanding. The 52-week range is $40.83 and $14.22.