Antofagasta PLC (LSE:ANTO) has reached an agreement in principle with Barrick Gold Corp. (TSX:ABX, NYSE:GOLD) and the governments of Pakistan and Balochistan that will enable a pathway for Antofagasta to exit the Reko Diq project and resolve a dispute.
The project was suspended in 2011 owing to a disagreement over the legality of its licensing process, the company said in a statement on Monday. The framework provides for the reconstitution of the project, it added.
The project will be reconstituted under a joint venture with Barrick. A consortium of Pakistani state-owned enterprises will then acquire shares in the unit that owns the project in a US$900mln deal, with proceeds distributed to Antofagasta in return for its exit.
The parties will work this year to finalise the agreement, with proceeds expected in 2023.