UPDATE 2-Antofagasta to buy Barrick Chile mine, eye more partnerships

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By Nicole Mordant
July 30 (Reuters) - Barrick Gold Corp ABX.TO agreed on
Thursday to sell 50 percent of its Zaldivar copper mine in Chile
to copper miner Antofagasta Plc ANTO.L for $1 billion in cash,
and both parties stressed that this was just the start of more
cooperation.
The emergence of family-owned, Chilean-based Antofagasta as
the winner of the competitive bidding process for a mine once
dubbed the "Andean ATM" is a surprise after market speculation
centered on either a Chinese or global miner as the buyer.
Both Barrick and Antofagasta said the deal was a launch pad
for future co-operation, likely in Chile where Barrick owns
large, unbuilt projects such as Pascua-Lama and Cerro Casale.
"Antofagasta has an outstanding track record of building and
operating mines in Chile, and we see this as the first step in
an ongoing, collaborative partnership," Barrick Co-President
Kelvin Dushnisky said in a statement.
Barrick spokesman Andy Lloyd declined to comment on any
specific projects for future partnerships.
Antofagasta would become the operator of Zaldivar, an open
pit mine, and would be overseen by a board consisting of three
nominees from each company.
Zaldivar is situated in northern Chile's main
copper-producing area right next to BHP Plc and Rio Tinto-owned
Escondida, the world's largest copper mine. Both BHP BHP.L and
Escondida itself had been tipped as potential buyers, as was
China Molybdenum Luoyang Co 603993.SS . ID:nL1N0Z3198
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Zaldivar last year produced around 100,000 tonnes of copper
at a net cash cost of $1.79 a pound and generated $244 million
before tax. That cash cost is still well below spot copper
prices, which were last at $2.38 a pound, near six-year lows.
The purchase of Zaldivar "represents a rare opportunity to
acquire a substantial interest in an established, low-cost
mining operation that generates strong cash flow," Diego
Hernandez, Antofagasta's chief executive, said in a statement.
Barrick, the world's biggest gold producer, said that
including the sale of Zaldivar, it has now announced
debt-reduction related deals worth around $1.85 billion.
The Toronto-based company has said it wants to reduce its
debt by at least $3 billion this year. The latest deal brings it
to nearly two-thirds of that total.
Barrick also said it was "actively exploring" a number of
other joint venture and sales opportunities. It would update the
market on Aug. 5 when it releases its second-quarter results,
the miner said.
M. Klein and Company and TD Securities Inc. were Barrick's
financial advisers. Citi advised Antofagasta.