Skip to main content

The Globe and Mail

Barrick to sell half of Argentina mine to Chinese miner

Barrick Gold is selling a 50-per-cent stake in the Veladero mine, seen in this file photo, to Chinese mining company Shangdong Gold Group for $960-million.

REUTERS

Barrick Gold Corp. says it is selling a 50-per-cent stake in its Veladero mine in Argentina to Chinese mining company Shangdong Gold Group for $960-million as part of what it calls a "strategic co-operation agreement."

The Toronto-based gold miner says as part of the deal, the two companies will also explore the joint development of its Pascua-Lama deposit, located about 10 kilometres from the Veladero site.

Barrick says a third element of the arrangement with Shangdong will see the companies look into investment opportunities on the El Indio Gold Belt along the Argentina-Chile border, which is already home to a cluster of gold mines and projects.

Story continues below advertisement

Barrick says the deal is expected to close at the end of the second quarter, pending regulatory and other conditions, including Shandong shareholder approval.

"Shandong is an ideal partner to help us unlock the untapped mineral wealth of the El Indio Belt over the long-term, while working with us to generate more value from the Veladero mine today," said Barrick executive chairman John L. Thornton.

"We look forward to working in partnership with Shandong, sharing mining and development expertise, talent, and capital in ways that will create added value for our respective owners."

"We are excited to enter Argentina's dynamic mining industry in partnership with Barrick at Veladero," added Shandong chairman Chen Yumin.

The Veladero mine, in Argentina's San Juan province, had proven and probable gold reserves of 6.7 million ounces as of Dec. 31, 2016. Barrick says the mine is expected to produce 770,000-830,000 ounces of gold this year.

Shandong Gold, founded in 1996, has a current market cap of about $9.6-billion and produced about 1.2 million ounces of gold in 2016.

This arrangement comes about a week after Barrick and Vancouver-based Goldcorp agreed to join forces to advance several mining projects clustered in northern Chile.

Story continues below advertisement

They announced on March 28 that Goldcorp will buy the 25 per cent stake held by Kinross Gold Corp. in Cerro Casale and other assets in a deal that includes $260-million (U.S.) cash.

Goldcorp also agreed to pay the first $260-million of Barrick's costs towards developing Cerro Casale as part of an agreement for an additional 25 per cent stake.

Goldcorp said it would also contribute to the nearby Caspiche project, which it will acquire by purchasing Exeter Resource Corp. in a separate transaction valued at $247-million (Canadian). Half of the acquisition price of Caspiche will be credited toward the $260-million (U.S.) in Barrick's costs that Goldcorp has agreed to pay.

Report an error Licensing Options
Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Globe Newsletters

Get a summary of news of the day

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at privacy@globeandmail.com.