A wee article on the ***** site that is not going to do any harm...

A wee article on the Kitco site that is not going to do any harm .

Barrick to invest record $10bn in new gold mines, says CEO Wilkins
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By: Bloomberg
Published: 21 Mar 08 - 0:00
The world’s largest gold producer, Barrick Gold, will invest a record $10-billion in new mines during the next five to seven years amid record gold prices, CEO Gregory Wilkins estimates.

Barrick is developing projects in countries including Tanzania and Argentina and is studying the viability of others in South Africa and the US.

Wilkins expects borrowing costs to decline and may wait as long as nine months to sell bonds and refinance debt.

“We know the treasury rate is coming down, and that’s a good reason to wait,’’ Wilkins said in an interview. “Credit spreads will come down with people getting more confident, so I think the debt-financing market will look better six to nine months from now.”

Barrick will borrow to refinance a loan it used to buy a stake in Nevada’s Cortez mine for $1,7-billion and to pay for its share of the $2,7-billion development of the Pueblo Viejo project, in the Dominican Republic, Wilkins said. The company may seek a bank loan using the project as collateral to pay for part of its development, he said.

“We’ll tap into the credit markets, and they’re completely available to us,’’ Wilkins said from the com- pany’s Toronto headquarters.

Defaults tied to subprime mortgages have soared since July, roiling credit markets and causing debt spreads to widen on investor concerns that companies wouldn’t be able to repay debt. Moody’s Investors Service rates Barrick Baa1, the third-lowest investment-grade ranking, with a stable outlook.

SPREADS WIDEN

The extra yield investors demanded for investment-grade debt compared with similar-maturity Treasury notes widened 20 basis points reantly, to 272 basis points, matching the highest spread since at least 1997, according to Merrill Lynch & Company.

“We’re told that there is still a lot of depth in the investment-grade market,’’ Wilkins said. “The high-yield market has shut down – there’s nothing there – but for investment grade, there’s as much money as you can manage.’’

Wilkins said he has no plans to sell new shares to finance the company’s investments.

Edited by: Martin Zhuwakinyu