Saudis to buy stake in Barrick’s Reko Diq: FT

Saudi Arabian mining fund Manara Minerals is set to buy a 10%-20% in the Reko Diq copper and gold project in Pakistan for about US$500 million to US$1 billion, the Financial Times reported on Tuesday.

Manara Minerals would buy the equity stake from the government of Pakistan, which is being co-developed by Barrick Gold (TSX: ABX; NYSE: GOLD), the FT said, citing unnamed sources close to the negotiations. 

Saudi Arabia’s involvement is also to include an offtake agreement. Negotiations are progressing, with an expected deal within six months, the London-based publication said. 

Shares in Barrick Gold edged less than 1% lower to $23.13 apiece on Tuesday morning in Toronto for a market value of $40 billion. 

Keeping stake

Barrick Gold said on Monday it wouldn’t reduce its half stake in Reko Diq. Pakistan’s national government and Balochistan state each hold a quarter.

The US$9-billion capex mine over two stages is projected to generate about US$74 billion in free cash flow over 37 years, based on consensus long-term prices, the company said. 

The mine’s first stage, expected to produce 200,000 tonnes of copper concentrate and 250,000 oz. of gold annually starting in 2029, is slated to cost US$5.5 billion, CEO Mark Bristow told Pakistani media. A US$3.5-billion second stage is projected to double production, he added.