Exclusive: Chinese miners in talks for stake in Barrick’s Veladero mine – sources – by John Tilak and Nicole Mordant (Reuters U.S. – October 25, 2016)


TORONTO/VANCOUVER – China’s Zijin Mining Group Co Ltd and Shandong Gold Mining Co Ltd have held separate talks with Barrick Gold Corp to buy a 50 percent stake in its Veladero gold mine in Argentina, according to four sources with knowledge of the process.

Veladero is one of Barrick’s five core mines, which are all in the Americas. It is expected to produce between 580,000 and 640,000 ounces of gold this year.

The high quality of the mine, production capacity and the prospect for geographical diversification have appealed to the state-owned Chinese suitors, said three of the sources, who requested anonymity because the matter is private. All of the persons spoke over the past week.

Barrick, the world’s biggest gold miner, has not launched a formal sales process for Veladero, and there is no certainty that the talks will result in a transaction, the sources said. A potential sale of a 50 percent stake could fetch Barrick more than $1 billion, two of the sources said. Barrick, Shandong and Zijin declined to comment.

Barrick’s shares, up about 2.6 percent on higher gold prices, extended their gains after the Reuters report. They climbed as much as 6.7 percent, hitting their highest level in more than 3 weeks. The stock traded 3.3 percent higher, at C$22.82, on Tuesday afternoon in Toronto.

Last month, operations at Veladero were shut down for more than two weeks after a cyanide spill at the high-altitude mine. This was the second cyanide spill at the mine in a year.

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