Barrick Gold Corp (GOLD 1.64%) has been divesting non-core and poorly performing assets at a rapid rate in an attempt to make itself leaner as part of its portfolio optimization strategy. Recently, Barrick announced that it will sell 13.5% of its stake in African Barrick Gold plc, which will raise approximately $188 million and leave Barrick with a remaining 64% stake.

This divestiture follows several other recent transaction in 2014, including the sale of its interest in the Kanowna Belle and Kundana mine operations in Australia for $66.4 million and the sale of its 33% interest in the Marigold mine in Nevada to Silver Standard Resources (NASDAQ: SSRI) for $86 million. The total of Barrick's divestitures since mid-2013 (when Barrick Gold really kickstarted its portfolio optimization strategy with the $400 million sale of Barrick Energy) has reached approximately $1 billion. Most of the assets divested represented high-cost, unprofitable non-core ounces.

Barrick seems to be working hard to optimize its portfolio. In order to prioritize profitable production, Barrick has used a conservative estimate of $1,100 per gold ounce when calculating reserve estimates. Barrick has reduced reserve estimates by 26%, with a large part of the reduction coming from high-cost ounces. Furthermore, Barrick has released estimated production for 2014 of 6.0 to 6.5 million ounces of gold, which is below the 7.16 million ounces produced last year due to divesting or shutting down unprofitable operations.

Debt overhang
Barrick currently has a large amount of long-term debt which totals $12.9 billion. In the fourth quarter of 2013, Barrick raised $3 billion in a bought equity deal to repay debt, which reduced its maturities over the next four years to $1 billion and provided it with some medium-term relief. Barrick reported a 2013 net loss of $10.37 billion including a fourth quarter net loss of $2.83 billion. The huge loss is attributable to after-tax impairment charges of $11.54 billion, including $6 billion related to the suspended Pascua-Lama project.

Cost of production
Barrick's 2014 gold cost guidance is quite low for a senior producer, with all-in sustaining costs expected to be in the range of $920-$980. While Barrick seems to be on the right track with its portfolio optimization strategy, it still has several high-cost segments that are hurting overall performance. African Barrick's estimated all-in sustaining costs for 2014 are $1,100- $1,175 per ounce. Barrick's Australia-Pacific division is expected to produce roughly 1 million-1.1 million ounces in 2014 at all-in sustaining costs of $1,050-$1,100 per ounce while its North American-Other division is expected to produce 0.795-0.845 million ounces in 2014 at all-in sustaining costs of $1,075-$1,100 per ounce.

Comparison to Goldcorp
In comparison to Goldcorp, (GG) Barrick is taking a more conservative approach, choosing to slash production in favor of cost savings. Goldcorp is also focused on cost reduction and portfolio optimization, but will be increasing its projected ounces of gold produced by an estimated 15% in 2014 by bringing three more mines online. Goldcorp also recently launched a $2.6 billion hostile takeover bid for Osisko Mining Corporation. With roughly $1.5 billion long-term debt and a long term debt-to-equity ratio of 0.07, Goldcorp is in a much better financial position than Barrick to pursue growth at this point .

Foolish takeaway
While Barrick has made impressive strides to optimize its portfolio, there are still several segments of its operations that it would like to divest. Barrick has saddled itself with a heavy amount of long-term debt that will likely continue to drag on share performance in the near term. If Barrick continues to be successful in divesting its high-cost operations and reducing cost expenditures, it should be able to generate a higher amount of cash flow that will allow it to pay down debt. With gold prices rising and Barrick seemingly turning the corner, the stock may look attractive. However, much like the company itself, investors may want to remain conservative and take a wait and see approach.