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Barrick seeks 'distinctive and preferred relationship with China'

Section: Daily Dispatches

Barrick Eyes China Money to Lower Africa Risk After Randgold Deal, Sources Say

By John Tilak and Clara Denina
Friday, September 28, 2018

Barrick Gold Corp. will seek Chinese investments in some of its African mines to offset higher risk stemming from its planned $6.5 billion all-stock acquisition of Africa-focused miner Randgold Resources, people familiar with Barrick's thinking said.

Toronto-based Barrick will also lean on Randgold Chief Executive Officer Mark Bristow's expertise in dealing with governments in challenging jurisdictions to navigate the Africa continent risk, the people said, addressing a concern of some Barrick shareholders.

... Dispatch continues below ...


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The sources asked for anonymity because they were not authorized to publicly discuss the matter involving the world's biggest gold miner.

Barrick's African expansion is a departure from its recent strategy of focusing on relatively safe regions like the United States. Africa will represent about 30 percent of Barrick's net asset value after the deal closes, up from some 15 percent, Desjardins Securities estimates.

Chinese involvement in Africa will likely include minority stakes or joint ventures in mines, the people familiar with Barrick's thinking told Reuters.

China's Zijin Mining Group and Shandong Gold said this week the deal provides additional opportunities to expand their partnerships with Barrick in Africa. ...

Barrick's executive chairman, John Thornton, a former Goldman Sachs banker, has been building relationships with Chinese miners as part of a plan to reduce exposure to risky jurisdictions. That work has intensified in recent years, notably with Shandong's near billion-dollar investment in Barrick's Argentine mine in 2017. ...

"It's been a goal of ours to build a distinctive and preferred relationship with China," Thornton said on a conference call Monday. ...

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