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TORONTO, May 26 (Reuters) - Barrick Gold Corp said on Tuesday it has forged a strategic tie-up with Zijin Mining Group Co and agreed to sell the Chinese miner a stake in a mine in Papua New Guinea as a first step toward further collaboration.
Toronto-based Barrick, under the stewardship of Executive Chair John Thornton, has since 2013 vowed closer ties with the Chinese, as it attempts to reduce its debt load and cut capital expenditure risks around the development of large new projects. (reut.rs/1EuSi1q)
Thornton, who took over the reins at Barrick from Peter Munk in 2014, spent years working in China after stepping down from a senior role at Goldman Sachs.
The tie-up with Zijin may take some of the heat off Barrick and Thornton, who since joining the board in 2012 has twice come under fire from investors for receiving large bonuses at a time when Barrick's share price languished around all-time lows.
Zijin, on its part, is trying to expand its presence outside China and it recently bought 9.9 percent stakes in two Canadian miners - Ivanhoe Mines Ltd and Pretium Resources Inc . Earlier on Tuesday, it also agreed to buy a big stake in Ivanhoe's Kamoa copper project in the Democratic Republic of Congo (DRC).
Barrick said it has signed a long-term strategic cooperation agreement with Zijin which outlines the intent of both companies to collaborate on future projects and joint investments.
"It will be interesting to see if the partnership with Zijin as that company tiptoes out into international mining, can create additional value," said J.P. Morgan analyst John Bridges in a research note.
Barrick, the world's largest gold producer, said Tuesday it would sell 50 percent stake in its unit that manages the Porgera gold mine in Papua New Guinea to Zijin for $298 million in cash. The unit, Barrick Niugini, owns 95 percent in the Porgera mine and the Papua New Guinea government owns the rest.
The deal, a part of Barrick's plan to reduce net debt by at least $3 billion by the end of the year, comes a day after the it sold its Cowal gold mine in Australia to Evolution Mining for $550 million.
Zijin and Barrick will jointly control Barrick Niugini after the sale, which is expected to be completed in the third quarter, the Canadian miner said on Tuesday.
Barrick shares were down 3 percent in early trading on Tuesday as gold prices slid. (Reporting by Euan Rocha in Toronto, Nicole Mordant in Vancouver and Sneha Banerjee in Bengaluru; Editing by Kirti Pandey and W Simon)