Shandong Gold Mining Co Ltd will pay US$960 million for a 50% stake in Barrick Gold Corp’s Veladero Gold Project in San Juan Province, Argentina. The deal will also see the companies look at jointly developing the nearby Pascua-Lama Gold-Silver Project on the border of Argentina and Chile.

In a statement Barrick said the two miners would also look at other additional investment opportunities on the El Indio Gold Belt in the Andes on the border of Argentina and Chile, which hosts a cluster of world-class gold mines and projects including Veladero, Pascua-Lama, and Alturas.

Barrick executive chairman John Thornton said, “Our ambition is to make Barrick a leading 21st-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 agreement 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 development expertise, talent, and capital in ways that will create added value for our respective owners, and our government and community partners in San Juan province.”

Shandong Gold’s chairman Chen Yumin said, “In this global economy, it is more important than ever to find international partners with a common vision for developing mines and generating prosperity in an environmentally and socially responsible manner.

“We are excited to enter Argentina’s dynamic mining industry in partnership with Barrick at Veladero, while exploring other opportunities in one of the most prospective mineral districts in the world.”

Shandong is China’s second largest gold producer behind Zijin Mining Group Co Ltd and the nation’s leading underground mining company. It is based in Jinan, Shandong 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. In order to ensure continuity of operations, both companies intend to maintain the mine’s current management team following closing of the transaction.

The deal came after Shandong had taken the lead in talks with Barrick to take a stake in the mine after discussions with rival Chinese firm Zijin fell through. or