Fluor to Sell Part of Its Gold-Mine Operations

Fluor Corp. said Monday it is planning to sell part of its worldwide gold mining operations through a public offering of common stock that could raise tens of millions of dollars.

The move would be one of the more unusual steps in Fluor’s yearlong “asset redeployment” program, in which real estate holdings and other assets have been sold off to repay debt and consolidate the company’s far-flung operations. The largest transaction in that series to date was the $340-million sale and leaseback of its Irvine headquarters.

As currently envisioned, Fluor would form a new company--St. Joe Gold Co.--to house the gold-mining operations and then sell no more than 49% of the stock, the company said.

The company would not say how much the gold properties would be worth in such an offering, though one analyst speculated that a 20% to 30% share of the operation could raise $50 million to $60 million.

A Fluor spokesman said the California and Chile gold mining operations shipped 157,000 troy ounces during the first six months of this year. At current prices of about $325 an ounce, that would be worth more than $50 million.

In fiscal 1984, the company’s overseas mines sold about 293,514 troy ounces of gold, while its domestic operations sold an additional 10,423 troy ounces, according to the 1984 annual report. The spokesman said the operations have been profitable.

“They will retain access to what is a majority interest in the company,” said Mark Altman, vice president of research for Paine Webber in New York. “They will control it and they will get the money out, which is one of their objectives.”

Proceeds from the offering could be used for acquisitions of new companies or could be held in reserve for the eventual buy-back of Fluor stock, Altman said.

The Fluor spokesman declined to say when the offering might be complete. Steps toward the offering are “beginning to take place now,” and Fluor has already discussed the offering with an underwriter that a spokesman declined to identify.

Analysts said the investment banking firm of Smith Barney, Harris Upham & Co. would likely lead the offering. An executive reached at the company’s New York headquarters would not comment on the report but added, “Call back in a week.”

Fluor owns interests in several mines in the United States, Australia, Argentina and Chile through its St. Joe Minerals Corp. subsidiary. The company’s gold operations primarily consist of an 83% interest in the giant El Indio mine in Chile and a 66% interest in a small mine in Northern California.

Although Fluor officials refuse to say what other company operations may be up for sale, rumors persist that all or part of its half interest in Richmond, Virginia-based A.T. Massey Coal Co. Inc. will be sold soon. Among possible suitors, some analysts say, is the Royal Dutch Shell Group, which owns the other half of the Massey coal concern.

“Due to the fact that we are in labor negotiations for a good part of the A.T. Massey mines, we are not getting specific as to the negotiations regarding the mines,” the Fluor spokesman said.