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China’s Zijin hands $298 million to partner Barrick Gold

China’s Zijin hands $298 million to partner Barrick Gold

Porgera gold mine in Papua New Guinea (Image courtesy of Barrick Gold)

Canada’s Barrick Gold Corp. (TSX:ABX) said Monday it has received US$298 million cash from China’s Zijin Mining Group, which bought half of Barrick’s interest in the Porgera mining operation last May.

The company, the world’s No.1 gold producer, said it would use the money to reduce its debt by at least $3 billion by the end of this year.

The deal is part of a long-term strategic cooperation agreement between Barrick and Zijin to collaborate on future projects and joint investments, leveraging the strengths of each company.

Today’s announcement means that the Chinese firm now owns 50% of Barrick (Niugini) Ltd., which has a 95% interest in the Porgera gold mine, in Papua New Guinea.

Zijin is China’s No.1 gold producer and the 2nd largest large copper producer. It also has a portfolio of producing and development assets in its home country, Tajikistan, Mongolia, Russia, Australia and Kyrgyzstan.