Shandong said to eye stake in Barrick mine

• China’s Shandong Gold Mining Co. Ltd. is in advanced talks to buy a 50 per cent stake in Barrick Gold Corp’s Veladero gold mine in Argentina, sources said.

Barrick is no longer in discussions with China’s Zijin Mining Group Co Ltd about the Veladero mine stake sale, the sources said. A sale could fetch more than US$1 billion, they added. Veladero, one of Barrick’s five core mines, was the site of a pipe rupture last week — the third incident in 18 months at the mine involving cyanide-bearing solution.

In the wake of the incident, the government of Argentina’s San Juan province, where Veladero is located, said on Wednesday it has rejected a work plan presented by Barrick.

San Juan’s governor and provincial mining minister met with Barrick President Kelvin Dushnisky and other company executives, according to a statement on the province’s website. A second meeting is expected to be scheduled soon, it said.

Barrick will “work with the authorities to understand their concerns and make adjustments as needed,” a spokesman said in an emailed response.

As part of a purchase plan being discussed, Shandong would also acquire 50 per cent of Barrick’s nearby undeveloped Pascua-Lama gold and silver project, one of the people said.

The Pascua-Lama project, which straddles the border of Argentina and Chile in the Andes, was put on hold in 2013 due to environmental issues, political opposition, labour unrest and development costs that ballooned to US$8.5 billion.

Shandong did not immediately respond to a request for comment. The company halted trading in its shares in Shanghai late on Wednesday pending an announcement.

VELADERO, ONE OF BARRICK’S FIVE CORE MINES, WAS THE SITE OF A PIPE RUPTURE LAST WEEK.