Zijin, Shandong go after Barrick Gold’s Veladero mine in Argentina

China's Zijin Mining Group and Shandong Gold Mining are said to be among the firms that have recently approached Canada’s Barrick Gold Corp (TSX, NYSE:ABX) with the intention of buying a 50% stake in one of its Argentine mines.

The potential sale of a 50% stake in Veladero mine could fetch Barrick more than $1 billion.

According to sources familiar with the matter quoted by Reuters, both Asian miners have held separate talks with the world’s largest gold miner by output to try negotiating a deal that could let them grab half the ownership of Veladero, located in the mining-friendly San Juan province of Argentina.

The mine, one of the South American country’s largest gold operations, produced 602,000 ounces last year. Proven and probable mineral reserves as of December 31, 2015, were 7.5 million ounces of gold. Gold production in 2016 is expected to be 630,000-690,000 ounces at all-in sustaining costs of $830-$900 per ounce according to the company's website.

According to Reuters' sources, the Chinese companies value the high quality of the mine, its production capacity and the prospect for geographical diversification.

Last month, the mine was shut down for more than two weeks due to a cyanide spill, the second one registered at the mine in only a year.