Written by BNN.ca

Barrick Gold Corp. (NYSE: ABX) 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 that, as part of the deal, the two companies will also explore the joint development of its Pascua-Lama deposit, located about 10 kilometers from the Veladero site…[and] 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.

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.

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

Said Barrick executive chairman John L. Thornton:

“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. 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.”

Added Shandong chairman Chen Yumin

“We are excited to enter Argentina’s dynamic mining industry in partnership with Barrick at Veladero.”

The arrangement with Shandong comes about a week after Barrick and Vancouver-based Goldcorp, Inc. (NYSE: GG) agreed to join forces to advance several mining projects clustered in northern Chile.

Goldcorp