Barrick Gold and Saudi Arabian Mining Co. (Ma’aden) agreed in mid-July 2014 to form a joint venture to operate the Jabal Sayid copper mine 120 km southeast of Medina, Saudi Arabia. Barrick acquired its 100% interest in the mine when it acquired Equinox Minerals in 2011.

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The Jabal Sayid mine is scheduled to start production in late 2015. When fully operational, it is expected to produce 100 million to 130 million lb/y of copper in concentrate during its first full five years. (Photo courtesy of Barrick Gold)
 

Under the Barrick/Ma'aden agreement, each company will own 50% of the joint venture. Ma'aden will acquire its 50% interest for cash consideration of $210 million. The acquisition is expected to be completed in the fourth quarter of 2014 and is subject to customary closing conditions.

The Jabal Sayid mine is scheduled to start production in late 2015 and when fully operational is expected to produce 100 million to 130 million lb/y of copper in concentrate during its first full five years of operation. The mine will operate for up to 15 years, based on 1.4 billion lb of copper in proven and probable reserves as of December 31, 2013. The joint venture will carry out further exploration work within the mining license area and the exploration license area surrounding the mine with the aim of extending the mine life.

Ma'aden's mining activity currently includes phosphate, aluminum, gold and industrial minerals operations. Regarding Ma'aden's participation in the Jabal Sayid joint venture, company CEO Khaled bin Saleh Al Mudaifer said investment in Saudi Arabia's most important copper project in partnership with Barrick will allow it to attain added value for its investment through the transfer of specialized copper know-how and technology, initially at Jabal Sayid and thereafter at other locations in Saudi Arabia.

Construction of the processing infrastructure for the Jabal Sayid mine was completed in the third quarter of 2012, but commissioning was delayed when Barrick received notification from Saudi Arabia's High Commission for Industrial Security that the mine site was not in compliance with recently introduced safety and security standards. Since receipt of the notification, a dedicated EPCM team has been working toward achieving full compliance. Barrick said it has used the opportunity to study alternate hauling/hoisting options from the underground mine, with the goal of improving life-of-mine cash flow when it comes into production.

Also, since Barrick acquired its interest in the Jabal Sayid project in 2011, Saudi Arabia's Deputy Ministry for Mineral Resources (DMMR), which oversees the mining license, has questioned whether such change in the ownership of the project, as well as previous changes in ownership, required the prior consent of DMMR. Barrick is engaged in discussions with DMMR regarding this question.

Arabia's most important copper project in partnership with Barrick will allow it to attain added value for its investment through the transfer of specialized copper know-how and technology, initially at Jabal Sayid and thereafter at other locations in Saudi Arabia.

Construction of the processing infrastructure for the Jabal Sayid mine was completed in the third quarter of 2012, but commissioning was delayed when Barrick received notification from Saudi Arabia's High Commission for Industrial Security that the mine site was not in compliance with recently introduced safety and security standards. Since receipt of the notification, a dedicated EPCM team has been working toward achieving full compliance.

Barrick said it has used the opportunity to study alternate hauling/hoisting options from the underground mine, with the goal of improving life-of-mine cash flow when it comes into production.

Also, since Barrick acquired its interest in the Jabal Sayid project in 2011, Saudi Arabia's Deputy Ministry for Mineral Resources (DMMR), which oversees the mining license, has questioned whether such change in the ownership of the project, as well as previous changes in ownership, required the prior consent of DMMR. Barrick is engaged in discussions with DMMR regarding this question.

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