Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr
Issue link: https://emj.epubxp.com/i/822333
NEWS-LEADING DEVELOPMENTS 4 E&MJ; • MAY 2017 www.e-mj.com Barrick Sells 50% Interest in Veladero to Shandong Gold for $960 Million Barrick Gold announced on April 6, 2017 that as a first step in a new partnership with Shandong Gold Mining, of China, Shandong will acquire a 50% interest in Barrick's Veladero mine in San Juan prov- ince, Argentina, for $960 million. As a second step, Barrick and Shandong will form a working group to explore the joint development of the cross-border Argenti- na-Chile Pascua-Lama deposit, which is located 10 km from Veladero. As a third step, both companies will evaluate addi- tional investment opportunities on the highly prospective El Indio gold belt on the Argentina-Chile border, which hosts a clus- ter of world-class gold mines and projects, including Veladero and Pascua-Lama. Barrick's agreement with Shandong was its second major co-operation agree- ment in Latin America in eight days. On March 28, the company announced a joint-venture agreement with Goldcorp for development of the Cerro Casale and Caspiche gold projects in northern Chile (E&MJ;, April 2017, p. 4). On April 7, a day after Barrick's an- nouncement of its partnership with Shan- dong, Reuters reported that Argentine mining officials had told Barrick it must overhaul environmental and operating processes at Veladero, following a cyanide solution spill, and that the country's en- vironment ministry had asked for a total suspension of operations How these regulatory issues will be worked out remained an open question. Regarding the Barrick-Shandong agreement, Barrick Executive Chair- man John L. Thornton said, "Our ambi- tion is to make Barrick a leading twen- ty-first-century company in any industry in any jurisdiction, and by definition, that means creating a distinctive, enduring, and trust-based relationship with China and China's best companies. This agree- ment moves us down that path. "Shandong is an ideal partner to help us unlock the untapped mineral wealth of the El Indio Belt over the long-term, while working with us to generate more value from the Veladero mine today. We look forward to working in partnership with Shandong, sharing mining and de- velopment expertise, talent, and capital in ways that will create added value for our respective owners, and our govern- ment and community partners in San Juan province." Upon completion of the transaction, the Veladero mine will be overseen by a Joint Venture Board consisting of three nominees appointed by each company. To ensure continuity of operations, both companies intend to maintain the mine's current management team following clos- ing of the transaction. The transaction was expected to close at the end of the second quarter of 2017. The Veladero mine is located at eleva- tions between 4,000 and 4,850 m above sea level, approximately 375 km north- west of the city of San Juan, Argentina. As of December 31, 2016, the mine had proven and probable gold reserves of 6.7 million oz and measured and indicated gold resources of 3.3 million oz. The mine is expected to produce 770,000 to 830,000 oz of gold in 2017 at a cost of sales of $750 to $800/oz and all-in sus- taining costs of $840 to $940/oz. Barrick/ATAC Agreement: In other news that featured Barrick, on April 10, ATAC Resources announced that Barrick has agreed to a number of transactions with the potential of totaling $63 million to earn up to a 70% interest in ATAC's Orion gold project on the central portion of its Rackla gold property in east-central Yukon, Canada. Recent diamond drill re- sults at Orion have included an intercept of 61.29 m grading 2.75 g/mt gold. Freeport's Q1 Copper Output Drops Freeport-McMoRan reported consolidated sales of 809 million lb copper, 182,000 oz gold and 24 million lb molybdenum for first-quarter 2017. The company's sales volumes have been impacted by regula- tory restrictions on PT Freeport Indone- sia's (PT-FI) concentrate exports since mid-January 2017. PT-FI operates the Grasberg mine and the actions resulted in the deferral of about 190 million lb copper and 280,000 oz gold in first-quar- Barrick Executive Chairman John L. Thornton (left) and Shandong Gold Chairman Chen Yumin (right) sign a strate- gic cooperation agreement between the two companies in Jinan, Shandong province, China.