Corporate News Blog – Shandong Gold/Barrick Gold Deal for Stake in Argentina Gold Mine Veladero Approved by China’s Commerce Ministry

LONDON, UK / ACCESSWIRE / June 19, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Barrick Gold Corp. (NYSE: ABX). Shandong Gold Mining Co. Ltd announced on June 16, 2017, that it has received an “enterprise overseas investment certificate” from China’s Ministry of Commerce Anti-Monopoly Bureau and that the Shandong Provincial Department of Commerce issued a “corporate foreign investment certificate” with regards to its acquisition of 50% stake in Argentina’s Veladero gold Mine from Barrick Gold. Both certificates were issued after the Ministry of Commerce Anti-Monopoly Bureau issued the “do not implement further examination notice”. Canadian Gold Mining Company Barrick Gold and China’s Shandong Gold had announced the deal back on April 06, 2017. For immediate access to our complimentary reports, including today’s coverage, register for free now at:

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After the acquisition announcement by both companies, a “Notice of Further Overseas Examination” was issued to Shandong Gold by the Anti-Monopoly Bureau of the Ministry of Commerce of the People’s Republic of China. The Ministry conducted an in depth of the deal and found that the foreign investment was in-line with the “foreign investment management approach” of the company and did not require any further review.

Now that Shandong Gold has received the enterprise overseas investment certificate, the deal is a step closer to completion. Both companies have yet to complete legal formalities, get the other regulatory approvals and fulfill the closing conditions as laid out in their agreement before the deal is finalized.

Shandong Gold’s deal with Barrick Gold

Barrick Gold was founded in 1983 by Peter Munk, currently the Company’s Founder and Chairman Emeritus. Headquartered in Toronto, Canada, Barrick Gold is one of the world’s largest gold mining company, and one of Canada’s leading global corporations. Barrick Gold’s more than 75% gold production comes from Argentina, Canada, Dominican Republic, Peru, and the U.S. and has mining operations and projects in Australia, Chile, Papua New Guinea, Saudi Arabia, and Zambia. The company had proven and probable gold reserves of 85.9 million ounces at the end of FY16.

Established in 1996, Shandong Gold Group is headquartered in Jinan, Shandong province, China. The company is mainly engaged in the exploration, mining and smelting of gold mines. In FY16, Shandong Gold Group produced approximately 1.2 million ounces of gold and has a market capitalization of approximately $9.6 billion.

On April 06, 2017, Barrick Gold and Shandong Gold signed a three-part strategic cooperation agreement.

In the first step, Shandong Gold Mining Co., Ltd, a subsidiary of the Shandong Gold Group, would acquire 50% stake in Veladero gold mine located in Argentina from Barrick Gold. Shandong would pay $960 million for the 50% stake in Veladero. Shandong Gold’s acquisition of a stake in Veladero gold mine represented its first international foray.
In the second step, Shandong and Barrick Gold is to form a working group to explore the joint development of the Pascua-Lama deposit.
In the third step, both companies will explore further investment opportunities in the El Indio Gold Belt located on the border of Argentina and Chile. This belt has great potential and it is where some of the world’s major gold mines like Veladero, Pascua-Lama, and Alturas are located.

The Barrick Gold and Shandong Gold deal will set the stage for further cooperation between both companies for other international joint ventures.

Once the transaction is completed, the Veladero mine will be managed by a Joint Venture Board. This Joint Venture Board will consist of members from both companies, where each company will nominate three members. The current management team would continue after the closing of the transaction for smooth integration and continuity of operations. The deal was expected to be completed in Q2 2017 subject to regulatory approvals and other closing conditions.

Shandong had revealed at that time that, China’s National Development and Reform Commission (NDRC), and the State-owned Assets Supervision and Administration Commission (SASAC) of Shandong Province had already approved the deal. The companies were awaiting clearance from Chinese regulatory authorities like MOFCOM (Ministry of Commerce) and SAFE (State Administration of Foreign Exchange) etc.

About Veladero gold mine

Veladero gold mine is located in the San Juan Province of Argentina in the highly prospective Frontera District. As on December 31, 2016, the mine had 6.7 million ounces of gold in proven and probable mineral reserves. In 2016, the mine produced 544,000 ounces of gold and expects to produce 770,000-830,000 ounces of gold in 2017.

Last Close Stock Review

On Friday, June 16, 2017, Barrick Gold’s stock closed the trading session at $15.69, slightly up 0.32% from its previous closing price of $15.64. A total volume of 12.69 million shares were exchanged during the session. In the previous six months, shares of the Company have advanced 6.52%. Shares of the Company have a PE ratio of 12.90 and have a dividend yield of 0.76%. The stock currently has a market cap of $18.29 billion.

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