Barrick Gold Corporation the world’s largest producer of the metal, agreed to sell a 50 percent interest in the Zaldívar copper mine in Chile to Antofagasta Plc for a total consideration of $1.005 billion in cash, forming a new partnership with one of the world’s leading copper companies.
Antofagasta will pay Barrick $980 million in cash upon closing and $25 million in additional cash payments over the next five years for a 50 percent stake in the Zaldívar mine. The transaction is expected to be completed in late 2015 and is subject to customary closing conditions.
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“The sale of 50 percent of Zaldívar is consistent with our strategy to create long-term value for our shareholders. By selling a stake in this non-core asset, we strengthen our balance sheet while maintaining significant exposure to a strong cash-generating operation, ” said Kelvin Dushnisky, Co-President of Barrick. “Following a highly competitive auction process, we are pleased to reach an agreement with the ideal partner for Zaldívar. 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. There are many potential opportunities to benefit from Antofagasta’s experience as Barrick evaluates development projects in the future.”
Diego Hernandez, CEO of Antofagasta said. “We have consistently been impressed with the workforce at Zaldívar, and look forward to partnering with them. We also look forward to exploring other opportunities to collaborate with Barrick in the future.”
Zaldivar, in northern Chile, produced 222 million pounds of copper in 2014, according to Barrick’s website. Production costs last year were US$1.65 a pound and they are increasing as head grades fall
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