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11/21/2024 05:02:58 pm

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Chinese State-Owned Mines in Talks for Stake in Barrick's Veladero Mine: Report

Veladero Mine Sale.

(Photo : Getty Images) Chinese mining companies apparently have an interest in acquiring a stake in Barrick Gold Corp's Veladero gold mine in Argentina.

China's state-owned mining companies Zijin Mining Group Co. Ltd and Shandong Gold Mining Co. Ltd have held separate discussions with Barrick Gold Corp. to acquire a 50 percent stake in its Veladero gold mine in Argentina, according to people familiar with the matter.

The Chinese state-owned companies have been attracted by the high-quality of the mine, production capacity, and opportunities offered by geographical diversification, said three sources on condition of anonymity.

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The sources claim that both companies spoke to Barrick over the past week.

Another source in Barrick claims that the Canadian-based company has not launched a formal sales process for Veladero, and is not sure whether the ongoing talks would result in any transaction.     

Shandong and Zijin have, so far, declined to comment on the report. Barrick has also not issued any statement. 

Veladero is one of Barrick's five core mines, all of which are located on the American continent. The site is expected to produce between 580,000 and 640,000 ounces of gold in the current year.

A potential sale of a 50 percent stake could secure more than $1 billion for Barrick, sources claim, adding that the company may want the buyers to invest in its Pascua-Lama project in South America.

Barrick's shares climbed by nearly 2.6 percent in early trade and then extended gains after reports of a potential sale reached Toronto stock exchange.

The deal clearly symbolizes the growing interest of Chinese companies in the Latin American region, which abounds with rich resources and commodities. Companies from Mainland China have poured billions of dollars in the region to acquire local firms associated with the production of copper and iron ore miners, oil and gas concessions, and power.

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