Canada’s Barrick Gold Corporation has entered into an enhanced strategic cooperation agreement with Shandong Gold Group Co., Ltd., deepening Barrick’s partnership with one of China’s leading mining companies.
Barrick said in a statement that document builds on an earlier agreement signed between the two companies in April 2017, when Shandong Gold Mining Co., Ltd., acquired 50 percent of Barrick’s Veladero mine in Argentina.
“Over the past year, we have been laying the foundation for a distinctive, enduring, and trust-based relationship with Shandong Gold,” said Barrick Executive Chairman John L. Thornton. “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. 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.”
“Based on an identical culture and development concept, the joint operation of the Veladero mine in Argentina has obtained good effect,” said Chen Yumin, Chairman of Shandong Gold. “Shandong Gold and Barrick have maintained reciprocal visits of high frequency in respect of mining technology, corporate culture, community harmony, sustainable development and environmental protection, which has promoted cultural integration and management improvement. This signing of the Strategic Cooperation Agreement represents a new level of our partnership.”
Key elements of the enhanced strategic cooperation agreement include:
Shandong Gold is currently completing an independent evaluation focused on the potential to develop a mining project at Lama in Argentina, including a high-level evaluation of potential synergies between Lama and the nearby Veladero operation. Following the completion of this study, the Parties may agree to conduct additional studies and technical work to evaluate a number of development options, including: the construction of an open-pit mine at Lama; the 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. Any decision by Shandong Gold to invest in the project would be subject to additional agreement between the Parties.
Strengthening Collaboration Between Barrick and Shandong Gold Teams
Reflecting a mutual commitment to operational excellence, safety, efficiency, and best-in-class mining practices, the Parties have agreed to choose one of Shandong Gold’s mines as a platform for learning and collaboration. The Parties will share technical expertise and best practices related to mining technology, information technology, information management, and digital innovation.
Barrick and Shandong Gold have also agreed to establish additional mechanisms to foster greater communication and knowledge-sharing between their respective management and technical teams. Such engagement may cover mining, engineering, construction, social and environmental management, and finance. The Parties also agree to provide access to their respective supplier networks, service providers, investors, and capital providers.
Strengthening Cooperation on Investment Opportunities
Building on the Parties’ stated intent to evaluate joint investment in organic mining projects currently owned by Barrick or Shandong Gold, the Parties have agreed to consider opportunities to work together on acquisition opportunities or potential asset sales, if both parties agree it is in their collective best interests, and would enhance the value of such an opportunity.