One of the world’s leading gold mining companies has bolstered its partnership with a Chinese state-owned company.
Barrick Gold has announced in a statement this week that it has entered into a mutual investment agreement with Shandong Gold Group. Through the agreement, Shandong will purchase up to $300mn of Barrick’s shares, with Barrick investing the equivalent into Shandong.
“This mutual investment is another reflection of the deepening partnership between our two companies,” said Barrick Executive Chairman John L. Thornton. “Barrick and Shandong both believe that by working in partnership, we can leverage our collective strengths to unlock long-term value for our respective shareholders, just as we are at Veladero today, with the potential to expand to Lama and other El Indio Belt projects in the future.”
Yumin Chen, Chairman of Shandong Gold Group, commented: “Building on the enhanced strategic cooperation agreement entered on July 9, 2018, Shandong Gold Group is pleased to announce further steps to deepen the strategic partnership with Barrick Gold Corporation, through this mutual investment and cross shareholding initiative, to capitalize on respective strengths and realize long-term synergies and to unlock long-term value for the respective shareholders. Building on the excellent partnership at Veladero today, we believe additional long-term strategic value can be created by working closely together on other projects including Lama and El Indio Belt projects in the future.
The two companies are 50-50 joint venture partners at the Veladero mine in Argentina. The mine is on track to produce around 275,000 – 330,000 ounces of gold in 2018.
Shandong Gold is currently carrying out an independent evaluation of Barrick’s Lama project, including an analysis of potential synergies between Lama and the nearby Veladero operation.