Chinese buying 50% of Barrick Veladero, Pascua Lama-report

Pascua Lama has been on hold since 2013. (Image courtesy of Barrick Gold)

China’s Shandong Gold Mining is said to be “advanced talks” to buy 50% of Barrick Gold’ Veladero gold mine in Argentina after Zijin Mining, another Shanghai-listed mining firm apparently walked away from a deal.

Reuters reports that the mine which last year produced 544,000 ounces of gold and is considered one of Barrick’s five core mines could fetch in excess of $1 billion.

Last week a pipe carrying a cyanide-bearing slurry burst at the mine in the San Juan province in what was the third such event at the operation in less than 18 months. Veladero resumed operations in October after having been suspended for almost a month following the previous incident.

According to the report Shandong would also pick up half of Barrick’s halted Pascua Lama project straddling the border between Argentina and Chile. The controversial project high in the Andes was put on hold in 2013 after a budget blowout and political opposition from the Chilean side and environmental protests.

In May last year the miner agreed to pay $140 million to resolve a US class-action lawsuit that accused the world’s largest gold producer of distorting facts related to the project and its $8.5 billion price tag.

In September, Barrick appointed a new executive, George Bee, to kickstart the development of a less ambitious project focused on the Argentine side of Pascua Lama.

Lat month Barrick announced a 50-50 partnership with Goldcorp to develop projects in northern Chile, including Cerro Casale, one of the world’s largest gold-copper deposits.