Glencore gold assets valued at over $5 bln -source

By Eric Onstad

LONDON, Aug 26 (BestGrowthStock) – The gold assets that Glencore
International [GLEN.UL] plans to spin off would be worth over $5
billion, and it has dropped the idea of finding a partner for
its Prodeco coal assets, a source close to the situation said.

Glencore, the world’s biggest commodities trader, said in
its half-year results statement on Thursday that it planned a
partial spin-off or listing of its Kazzinc gold unit, of which
it holds a 51 percent stake.

The spin-off would help meet $1 billion of planned
disposals, of which $400 million had already been agreed,
Glencore said.

A source close to the situation, who declined to be named,
said the $5 billion valuation was partially based on the market
capitalisations of existing gold companies in London.

African Barrick Gold (ABGL.L: ), which produces about the same
amount of gold as Kazzinc, is valued at $3.6 billion, while
Randgold Resources (RRS.L: ), which produces less, is worth $8
billion.

It was still early days, and details have not been decided
on the size of the stake that might be spun off, but it could
range from 25-60 percent, the source said.

Other options were also a possibility, such as selling
Kazzinc’s gold operations to another gold company, he added.

Glencore has now dropped the possibility of finding a
partner for its Prodeco coal operations in Colombia, the source
said.

Glencore promised the $1 billion in disposals in March after
it bought back Prodeco for around $2.5 billion from mining group
Xstrata (XTA.L: ). At the time, it said disposals could include
selling a stake in Prodeco to a strategic partner.

It had held talks with four possible partners for Prodeco —
Brazil’s Vale (VALE5.SA: ) (VALE.N: ), U.S. coal miner Alpha Natural
Resources (ANR.N: ), Singapore’s sovereign wealth fund GIC and
U.S. private equity fund First Reserve Corp.
(Reporting by Eric Onstad; Editing by Will Waterman)

Glencore gold assets valued at over $5 bln -source