National Post (National Edition)
Barrick to partner with Shandong in Argentina
TORONTO • Barrick Gold Corp. is selling half of its Veladero mine in Argentina to Shandong Gold Group in the latest example of the Canadian company’s increasing focus on partnerships and on closer ties with China.
Shanghai-listed Shandong will take a 50-per-cent stake in a US$960-million deal that’s set to conclude by the end of this quarter, Barrick, the world’s largest gold producer, said in a statement Thursday. Veladero is expected to produce as much as 830,000 ounces this year and has reserves of 6.7 million ounces.
The arrangement, which extends to exploring joint development of the PascuaLama project on the Argentina-Chile border, presages deeper co-operation with China’s second-biggest producer by market value. It’s another sign that Barrick executive chairman John Thornton’s decision to forge stronger ties in Asia is paying dividends. In 2015, Barrick sold a 50-per-cent stake in a mine in Papua New Guinea to Zijin Mining Group Co. for US$298 million.
Barrick wants to create a “distinctive, enduring, and trust-based relationship” with China and “China’s best companies,” Thornton said in the statement. Proceeds from the sale of the Veladero stake are earmarked for paying down debt and other investments.
Shandong signalled a year ago it was looking to expand overseas. The company is also preparing to raise as much as US$1 billion by listing shares in Hong Kong, people familiar with the matter said in February.
It’s Barrick’s second announcement in just over a week on partnership arrangements in South America. The company will team up with fellow Canadian miner Goldcorp Inc. to develop a copper-gold deposit in Chile, the companies said on March 29. Barrick executive chair John Thornton. The sale of a stake in the Veladero mine in Argentina to China’s Shandong follows Thornton’s strategy of forging ties to Asia.