Barrick To Sell 50% Stake In Veladero Mine To China's Shandong Gold For $960 Mln

(RTTNews) - Barrick Gold Corp.(ABX, ABX.TO) announced Thursday that it has entered into a strategic cooperation agreement with Shandong Gold Group Co., Ltd., a Chinese underground mining company.

Under the new partnership, Shandong Gold Mining Co., Ltd, the listed company of Shandong Gold Group, will acquire 50 percent of Barrick's Veladero mine in San Juan province, Argentina, for $960 million.

Barrick and Shandong will also form a working group to explore the joint development of the Pascua-Lama deposit. Further, both companies will evaluate additional investment opportunities on the highly prospective El Indio Gold Belt on the border of Argentina and Chile, which hosts a cluster of gold mines and projects including Veladero, Pascua-Lama, and Alturas.

The transaction is expected to close at the end of the second quarter of 2017, and is subject to regulatory and other approvals, including Shandong Gold Mining Co., Ltd shareholder approval, and other customary closing conditions.

Upon completion of the transaction, the Veladero mine will be overseen by a Joint Venture Board consisting of three nominees appointed by each company. In order to ensure continuity of operations, both companies intend to maintain the mine's current management team following closing of the transaction.

Barrick Gold will use the proceeds from the transaction to reduce debt and for investments in business to grow free cash flow per share.

The company noted that the Strategic Cooperation Agreement with Shandong is consistent with its strategy to develop partnerships of depth with the potential to create long-term value for the Company's owners, as well as our community and government partners.