Barrick Gold has signed an agreement to sell a 50% interest in Chile’s Zaldívar copper mine to Antofagasta for $1bn.

Barrick Gold co-president Kelvin Dushnisky said: "By selling a stake in this non-core asset, we strengthen our balance sheet while maintaining significant exposure to a strong cash-generating operation.

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"Following a highly competitive auction process, we are pleased to reach an agreement with the ideal partner for Zaldívar.

"By selling a stake in this non-core asset, we strengthen our balance sheet while maintaining significant exposure to a strong cash-generating operation."

"Antofagasta has an outstanding track record of building and operating mines in Chile, and we see this as the first step in an ongoing, collaborative partnership."

Under the agreement, Antofagasta will pay $980m in cash to Barrick upon closing, $25m in additional cash payments over a period of the next five years and will become the operator of the mine.

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The transaction, subject to customary closing conditions, is slated for completion in late-2015 and will be funded with cash from Antofagasta’s balance sheet.

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Barrick and Antofagasta will leverage their expertise and experience to increase the value of the Zaldívar mine.

In 2014, the copper mine produced 222 million pounds of copper and production for the year is expected to be between 230 million and 250 million pounds.

Barrick reported 5.6 billion pounds of copper reserves at Zaldívar mine.

Antofagasta CEO Diego Hernandez said: "We are enthusiastic about partnering with Barrick at Zaldívar. Together, we believe that we are well-positioned to enhance the long-term value of the Zaldívar operation through our collective best practices."