Barrick Gold, the world's largest gold producer, has inked a binding agreement with Gold Fields, a South Africa-based mining company, to sell its Yilgarn South assets in Western Australia for $300m.

The Yilgarn South assets comprise Yilgarn South mines; the Granny Smith, Lawlers and Darlot gold mines.

The sale is part of Barrick's strategy to optimise its portfolio and focus primarily on low costs assets, due to surging metal prices and rising production costs at its Pascua-Lama gold project in the South American Andes.

These mines accounted for 6% of Barrick's gold output in 2012, and less than 2% of the gold miner's proven and probable reserves as of 31 December 2012.

The acquisition provides the South African miner with a further 452,000oz of annual production, at an all-in sustaining cost (AISC) of $1,137 per ounce.

Upon completion of the acquisition, Australia will be Gold Fields' largest regional production centre, accounting for 42% of the company's total production.

The transaction is expected to close by early October following regulatory approvals.

Barrick said that it intends to use the proceeds from the deal for general corporate purposes and debt reduction.

Gold Fields chief executive officer Nick Holland said that the company can add value to the Yilgarn South Assets through the application of its proven low-cost, free cash flow focussed operating model, which has been successful in repositioning Gold Fields' Australian operations competitively on the cost curve.

"Our first priority after closing the deal is to determine the most appropriate way forward for each asset in our endeavour to maximise cash flow.

"We expect that it will take between six and 12 months to realise the full benefits of the acquisition," Holland added.