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Barrick, Shandong Expand Ties, To Consider Joint Acquisitions

Kitco News

(Kitco News) - Barrick Gold Corp. (NYSE: ABX, TSX: ABX) has entered into an “enhanced strategic cooperation agreement” to share information with China’s Shandong Gold Group Co., Ltd. and possibly undertake new projects or acquisitions together, Barrick said Monday.

The document builds on an April 2017 deal in which Shandong acquired 50% of Barrick’s Veladero mine in Argentina for $960 million.

“Over thousands of hours and many site visits, we have worked side by side to deepen our understanding of each other’s values, strategic priorities and operating capabilities,” said John L. Thornton, Barrick’s executive chairman. “This agreement will allow us to take our partnership to the next level, as we jointly explore opportunities to enhance long-term value for our respective owners, as well as our government and community partners.”

Besides evaluating joint investment in organic mining projects already owned by one of the two companies, Barrick or Shandong Gold have agreed to consider working together on “acquisition opportunities or potential asset sales, if both parties agree it is in their collective best interests,” according to a Barrick news release.

One project in which the two companies may cooperate is Shandong Gold’s current evaluation of mining potential at Lama in Argentina. The study includes possible synergies between Lama and the nearby Veladero operation. Following the completion of this study, the two parties may undertake additional studies and technical work to evaluate development options, including construction of an open-pit mine, feasibility of using heap-leach processing for low-grade and easy-to-leach gold ore, and the feasibility of adopting low-cyanide or “other environmentally friendly” leaching reagents, Barrick said.

The companies have also agreed to share technical expertise and other knowledge, as well as provide access to respective supplier networks, service providers, investors and capital providers.

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