Chinese mining company Zijin Mining Group has signed a deal to invest $710m to buy a stake in gold and copper mining assets owned by two Canadian companies in Congo and Papua New Guinea.
Zijin Mining Group will pay $412m to Ivanhoe Mines to get 49.5% stake in the Kamoa copper project located in Congo.
The company will invest $298m for a joint venture with Barrick Gold, which will include Zijin initially buying 50% of Barrick (Niugini) (BNL).
BNL manages Porgera Joint Venture gold mine in Papua New Guinea and owns 95% of it.
Mineral Resources Enga holds the remaining 5% interest.
The companies have also signed a long-term strategic cooperation agreement in a bid to partner on future projects and joint investments.
As part of the new structure, Barrick and Zijin will jointly control BNL.
Both companies propose to work with local communities and other Papua New Guinea partners to ensure the mine generates value for all of its stakeholders.
The strategic cooperation agreement will also allow Barrick and Zijin to collaborate on future projects, which may also see them jointly developing the mine.
Barrick Gold chairman John Thornton said: “Our partnership with Zijin is the first step in a long-term strategic relationship with one of China’s leading mining companies, a multi-faceted partnership that will provide significant opportunities to work together on an ongoing basis as we continue to create value for our respective owners.”
Zijin Mining Group chairman Chen Jinghe said: “Our companies have complementary expertise and experience, and share a common vision for creating long-term value for our owners.
“We are excited to leverage our competitive strengths together, to start with at Porgera, while exploring additional joint opportunities for the future.”
The collaboration with Zijin will enable Barrick to bolster its balance sheet and pay down debt using the proceeds from the transaction.
Subject to customary closing conditions, the transaction is slated for completion in the third quarter of 2015.
Image: Zijin Mining Group chairman Chen Jinghe (left) and Barrick Gold chairman John Thornton (right). Photo: courtesy of Barrick Gold Corporation.