Barrick signs agreements in China

Although Canada’s historic trade mission in China has focused on so-called “high technology” enterprises, attention may now be shifting to one of this country’s more traditional industries — mining.

At a recent ceremony in Beijing, senior gold producer American Barrick Resources (TSE), through its 75% interest in Barrick Power Gold Corp. of China, signed two letters of intent with the China National Gold Corp. (CNGC), a state-run agency.

The letters cover development of the Paishanlou deposit near Fuxin City in Liaoning province, as well as exploration and development of the Changkeng deposit in Gaoyao and Gaoming Counties of Guangdong province. Barrick Power will acquire a 75% interest in the joint venture, which includes the Paishanlou deposit, by providing management, technology and financing for the project’s development. Barrick Power, which has been working on a prefeasibility study there since early 1994, envisions an open-pit mining operation of about 30,000 tonnes per day with a 4,000-tonne-per-day mill.

Exploration has outlined other areas of gold mineralization near the deposit. These areas will be drilled next year and incorporated into a mining plan by the end of 1995. The joint venture will have a registered capital of US$40 million.

The second joint venture proposes to undertake exploration, development and production of the Changkeng deposit.

Changkeng was chosen by Barrick Power because of the refractory nature of the mineralization. Barrick operates the world’s largest facility for autoclaving (a technique used to process refractory ores) at its Goldstrike property in Nevada. Tests on Changkeng ore samples, completed at Goldstrike, yielded high recovery rates, which confirms the suitability of this technique for Changkeng ores.

Barrick Power plans to complete a major exploration program at Changkeng once the joint-venture company has been established. According to a company spokesman, Barrick Power is looking for mines with a minimum reserve requirement of 1 million oz.

Barrick’s foray into China began earlier this year, when the company formed a joint venture with Power Corp. to pursue gold mining opportunities. Barrick holds a 75% interest in the venture, while Power holds the remaining 25%. In January, 1994, Barrick Power Gold Corp. signed an agreement with CNGC to accelerate the development of China’s gold mining industry. The agreement provides for CNGC to introduce prospective gold mining properties to Barrick Power for evaluation and development.

Interest in Barrick’s efforts in China was sparked again last month when Barrick created an international advisory board and named former prime minister Brian Mulroney as its chairman.

Additional details of the agreements and properties will be forthcoming after Barrick Power completes feasibility studies on the properties, sometime next year.

According to Gold 1994, published by Gold Fields Mineral Services, China’s gold production has risen to 127 tonnes from 59 tonnes in 1984, which represents a rise of 215% compared with the same period 10 years ago. Barrick’s spokesman says production comes from about 500 small gold mining operations that have suffered from a lack of either capital, technology or exploration.

China ranks as the world’s sixth-largest gold-producing nation or nation group, behind South Africa, the U.S,, Australia, the Commonwealth of Independent States and Canada.