By Liezel Hill & Thomas Biesheuvel – Jan 9, 2013 12:47 AM GMT+0300 
Barrick Gold Corp. (ABX),
 the biggest producer of the precious metal, ended talks over the sale 
of its 1.44 billion-pound ($2.32 billion) African unit to China National
 Gold Group Corp. without reaching an agreement.
Barrick still sees “a lot of value” in the assets held by its 
African Barrick Gold Plc (ABG)
 subsidiary, Toronto-based Barrick’s Chief Executive Officer Jamie 
Sokalsky said yesterday in a phone interview. Shares of African Barrick 
fell 21 percent in 
London yesterday.
African Barrick “does have some opportunities to enhance that value, 
and when we looked at that versus ultimately what China National Gold 
was talking about, it just wasn’t the right fit,” Sokalsky said. “We 
would have liked to have done this transaction, but it wasn’t about 
doing this at any cost.”
Sokalsky declined to comment on the specific issues that led to the 
end of the talks. Discussions had stalled because of differences over 
taxes and legacy issues, Chinese newspaper 21st Century Business Herald 
reported yesterday, citing CNG Chairman Sun Zhaoxue.
The deal would have been the largest gold-company takeover involving a
 Chinese company, according to data compiled by Bloomberg. Barrick said 
in August that CNG was in preliminary discussions about buying African 
Barrick Gold, which would have given the state-owned Chinese company 
four mines in 
Tanzania.
“This is a big asset, it’s a significant transaction for anyone, it’s
 a public company and ultimately over time multiple things came into the
 equation,” Sokalsky said. “It just didn’t make sense for both of us to 
transact, to ultimately complete a transaction.”
Rising Costs
Wu Zhanming, the vice president of CNG’s overseas investment unit, didn’t answer calls to his mobile phone.
African Barrick slumped to 352.1 pence at the close in London 
yesterday, the steepest decline since the shares were first sold in 
2010. Barrick 
fell 1.3 percent to C$33.14 in Toronto.
Sokalsky, who replaced Aaron Regent as CEO in June, is reviewing 
Barrick’s assets in an effort to improve returns and cash flow as costs 
rise. The company has received approaches from companies interested in 
some of its other assets, he said yesterday.
“If there are opportunities to divest assets that are worth more to 
someone else than us, we will absolutely take a look at that,” Sokalsky 
said. Barrick doesn’t “have anything to talk about at the moment.”
Illegal Miners
While Barrick will consider new approaches for African Barrick if it 
gets them, the company won’t actively solicit third parties for a sale 
of the business, Sokalsky said.
Since being spun off by Barrick, African Barrick has struggled to 
meet production targets amid operational setbacks and disruption caused 
by illegal miners. Selling African Barrick would have lowered Barrick’s 
production costs, Brian Yu, an analyst at Citigroup Inc. in 
San Francisco, said in an Aug. 16 note.
In October, African Barrick raised its 2013 forecast for average 
costs to $900 to $950 per ounce of gold from a July projection of $790 
to $860.
Barrick “will continue to look for ways to realize value from the 
block,” Numis Securities Ltd. in London said in a note to investors. 
“However, the news will come as a disappointment to some who saw it as a
 potential exit from this under- performing stock.”
Fewer Deals
Acquisitions in the gold industry have declined as slowing global 
growth tightened available credit. There were 175 completed deals worth 
$6.8 billion in 2012, the lowest in at least five years, according to 
data compiled by Bloomberg.
There are probably other companies interested in buying African Barrick, said 
David West, a Vancouver-based analyst at Salman Partners Inc. He didn’t name potential buyers.
“I wouldn’t be surprised to see another offshore entity maybe take a 
run at it,” West said in a telephone interview. “This stuff goes on all 
the time. I’m sure there are a lot more misses in terms of M&A 
activity than hits and this is just one of those misses.”
To contact the reporters on this story: Liezel Hill in Toronto at 
lhill30@bloomberg.net; Thomas Biesheuvel in London at 
tbiesheuvel@bloomberg.net
 To contact the editors responsible for this story: Simon Casey at 
scasey4@bloomberg.net; John Viljoen at 
jviljoen@bloomberg.net
 SOURCE: BLOOMBERG