From the Global and Mail
Barrick Gold Corp. is teaming up with China’s Zijin Mining Group Co. Ltd. to develop projects in a strategic partnership that Barrick chairman John Thornton has long been seeking.
Their first deal will see the state-owned Chinese ?miner pay Barrick $298-million (U.S.) for a 50-per-cent stake in Barrick’s Papua New Guinea gold business.
Since Mr. Thornton joined Barrick as a director in 2012, he has sought to use his deep connections in China to forge a meaningful relationship between Barrick and the Chinese.
This union will “provide significant opportunities to work together,” Mr. Thornton said in a statement. “China has become both the largest producer and consumer of gold, and a major source of capital and expertise for the mines of the future.”
Barrick did not elaborate on those “opportunities” and its agreement with Zijin is non-exclusive. That means Barrick could tap another company or work solo on some of its projects, such as its stalled Pascua Lama gold mine in the Andes and its new Goldrush gold property in Nevada.
Nevertheless, the deal with Zijin is a milestone for Mr. Thornton, who has been laying the groundwork for a union with the Chinese. Mr. Thornton, a former Goldman Sachs executive who established the bank’s presence in China, appointed a former colleague and U.S. diplomat to represent Barrick’s interests in China.
For its part, Zijin chairman Chen Jinghe said his company has “unrivalled access to the Chinese market.” Zijin, one of China’s biggest gold producers, is also working with another Canadian miner, Ivanhoe Mines Ltd. It owns nearly 10 per cent of the copper company and on Tuesday said it would pay $412-million for nearly 50 per cent of Ivanhoe’s copper project in the Democratic Republic of the Congo.
Kerry Smith, an analyst with Haywood Securities, said Zijin could help Barrick by buying its African gold operations, known as Acacia Mining, or Lumwana, the troubled copper mine in Zambia that Barrick purchased for about $7-billion.
The deal with Zijin comes three months after Mr. Thornton suggested a partnership with the Chinese was not happening. “We are in no hurry to do something, if we do anything at all,” he said in February. “I want to emphasize, don’t hold your breath for that because it will be a long time.”
The partial sale of Barrick’s Papua New Guinea business, along with the $550-million sale of its Australian mine will help reduce Barrick’s $13-billion debt. Mr. Thornton has vowed to cut the miner’s debt by at least $3-billion this year.
“Barrick still has far too much debt. However, they are progressing well with their debt reduction goal for 2015,” Mr. Smith said.
The asset sales and Chinese partnership will likely win favour with the many investors who have had little confidence in Barrick in recent years. Mr. Thornton has had a rough ride in his first year as chairman. His 2014 pay raise rankled shareholders who believed he was getting paid before delivering results.
Sobre Zijin Mining
Zijin Mining es una empresa líder mundial en el sector de metales y minería, y uno de los mayores productores globales de oro, cobre y zinc. Con más de 30 operaciones y proyectos mineros de gran escala distribuidos en 19 países y 5 continentes, la compañía aprovecha sus sólidas capacidades internas de investigación, ingeniería y desarrollo para mantener una alta eficiencia operacional y bajos costos, tanto en adquisiciones como en operaciones.
Este enfoque le ha permitido consolidarse como referente en la creación de valor, respaldado por su filosofía de desarrollo compartido y sustentado por un desempeño superior en materia ambiental, social y de gobierno corporativo. Las acciones de Zijin cotizan en la Bolsa de Hong Kong (HKEX: 2899) y en la Bolsa de Shanghai (SSE: 601899).