Canadian exploration and development company Barrick Gold has signed a mutual investment agreement with Chinese mining company Shandong Gold Group.

The new agreement is set to further bolster the relationship between the parties.

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As part of the agreement, Shandong Gold will purchase Barrick shares worth as much as $300m, and in return Barrick will invest an equivalent amount in shares of Shandong Gold’s publicly listed subsidiary Shandong Gold Mining.

Barrick Gold executive chairman John Thornton said: “Barrick and Shandong both believe that by working in partnership, we can leverage our collective strengths to unlock long-term value for our respective shareholders, just as we are at Veladero today, with the potential to expand to Lama and other El Indio Belt projects in the future.”

The companies are already 50-50 joint venture partners in the Veladero mine in Argentina. Shandong acquired a 50% interest in the mine from Barrick last year.

As part of the partnership, Shandong is undertaking an independent evaluation of Barrick’s Lama project, which is located on the border between Argentina and Chile.

Shandong will carry out an analysis of potential synergies between Lama and the nearby Veladero operation.

Shandong Gold Group chairman Yumin Chen said: “Building on the enhanced strategic cooperation agreement entered on 9 July 2018, Shandong Gold Group is pleased to announce further steps to deepen the strategic partnership with Barrick Gold Corporation, through this mutual investment and cross shareholding initiative, to capitalise on respective strengths and realise long-term synergies and to unlock long-term value for the respective shareholders.

“We believe additional long-term strategic value can be created by working closely together.”

“Building on the excellent partnership at Veladero today, we believe additional long-term strategic value can be created by working closely together on other projects including Lama and El Indio Belt projects in the future.”

The parties have also set up internal working groups to share technical expertise and best practices regarding mining and innovation.

In a separate deal, Barrick agreed to merge with Randgold Resources to create the world’s biggest gold miner, with a market capitalisation of about $18bn.