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Report: Shandong in advanced talks to acquire 50% stake in Barrick's Veladero

Chinese miner Shandong Gold Mining Co. Ltd. is in advanced discussions with Barrick Gold Corp. to acquire a 50% stake in the Veladero gold mine in Argentina's San Juan province, Reuters reported April 5, citing people familiar with the process.

The mining major is no longer in talks with Zijin Mining Group Co. Ltd. over the stake, and a sale could fetch over US$1 billion, the sources noted.

As part of the proposed transaction, Shandong will acquire a 50% interest in Barrick's shuttered Pascua Lama gold project, which straddles the border of Argentina and Chile.

Reuters reported in October 2016 that Barrick was holding separate discussions with the two Chinese groups for the stake sale in Veladero.

However, there is no certainty that the talks will result in a deal, the sources added.

Shandong did not comment on the transaction. Meanwhile, the company on April 5 halted trading in its shares in Shanghai, pending an announcement.

A third cyanide spill was reported at Veladero last week, after which the company was ordered to halt some operations at the mine.

Later, the government of San Juan province temporarily restricted the addition of cyanide to Veladero's heap leach facility.

Meanwhile, the provincial government said in a statement that it has rejected a work plan presented by Barrick in the wake of the incident.

San Juan's governor and provincial mining minister held discussions with Barrick President Kelvin Dushnisky and company executives, while another meeting is expected to be scheduled soon.

A spokesperson for Barrick said in an emailed statement that the company will "work with the authorities to understand their concerns and make adjustments as needed."