Barrick completes sale of 50% of Zaldívar copper mine to Antofagasta

Barrick completes sale of 50% of Zaldívar copper mine to Antofagasta

Zaldívar copper mine is located about 1,400 km north of Chile's capital Santiago. (Image courtesy of Barrick Gold)

Top gold miner Barrick Gold (TSX, NYSE:ABX) announced Tuesday it has completed the sale of a 50% stake in its Zaldívar copper mine in Northern Chile to London-listed Antofagasta Plc (LON:ANTO) for a shade over $1 billion in cash.

"The sale of 50 percent of Zaldívar has strengthened our balance sheet while allowing us to maintain significant exposure to a strong cash-generating operation," Barrick President, Kelvin Dushnisky, said in a statement.

The miner added it has formed a new partnership with Antofagasta that will provide “a platform to collaborate and share knowledge, with the potential to deliver value for both companies."

Zaldívar, an open-pit, heap-leach mine, produced 222 million pounds of copper in 2014, according to Barrick’s website. Proven and probable copper reserves from the mine as at Dec. 31, 2014, were 5.558 billion pounds. Production costs last year were US$1.65 a pound and they are increasing as head grades fall.

Barrick has been selling off assets to tackle a debt pile of $13 billion with a target of wiping out $3 billion this year. The proceeds of Zaldívar’s sale will be used to that purpose, the company said.