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Barrick Gold Corp. says it is looking at doing more deals with China’s Shandong Gold Group, a sign that the world’s biggest gold producer could be ready to pull the trigger on large acquisitions again after sitting on the sidelines for most of this decade.

In a release on Monday, Barrick said it is strengthening ties with state-owned Shandong, an arrangement that may see the duo team up on acquisitions or sell assets to each other.

While Barrick has sold stakes in a number of its mines over the past few years to a range of buyers, including Shandong, it hasn’t made a large acquisition of its own in some time. Barrick’s last big deal was its ill-timed US$7.3-billion purchase of Equinox Minerals Ltd. in 2011.

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Before joining Barrick, executive chairman John Thornton headed up Goldman Sachs’s Chinese operations, and one of his imprints over the past few years has been forging relationships with Chinese firms. In 2015, under Mr. Thornton’s stewardship, Barrick sold a large stake in a Papua New Guinea gold project to China’s Zijin Mining Group for US$300-million. Last year, Barrick sold half of its share in a mine in Argentina to Shandong for $960-million. Since then, Barrick has also been looking to Shandong to potentially revive its Pascua-Lama gold and silver project in South America, which straddles the border between Argentina and Chile.

In 2013, Barrick was forced to halt construction of the Pascua-Lama mine, amid billions in cost overruns and environmental opposition from Chile. On Monday, Barrick said that Shandong is considering a number of new options, including possibly developing an open-pit mine at Lama on the Argentine side of the project.

“It makes a lot of sense,” said John Ing, gold analyst with Maison Placements, in an interview on Barrick deepening its ties with Shandong. Mr. Ing believes the relationship between the two mining companies will be a lot more than merely teaming up on deals, or Shandong cherry-picking assets it wants to buy from Barrick. The relationship will also be about Barrick tapping Shandong's technical expertise in mining and having access to another source of capital, he said.

In a note to clients on Monday, Christopher LaFemina, analyst with Jefferies LLC, wrote that M&A in the global mining sector may be back on the table.

“We expect the mining industry to transition from the current ‘cash flow, capital returns and austerity’ phase to a ‘growth and M&A’ phase that will start with small deals but escalate to larger transactions,” he wrote.

“We ultimately expect the major miners to be acquisitive.”

Mr. Thornton has made it clear that Barrick will not engage in reckless deal making just for the sake of growing. The company is not keen to repeat the experience it had with Equinox. Less than two years after acquiring the copper producer, Barrick wrote down its value by US$3.8-billion. Since then, Barrick has mostly hunkered down, paying down billions in debt and concentrating on generating free cash flow. In the interim, the company has also seen its production fall, its reserves dwindle and its share price fall by about two-thirds.

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After an extended hibernation, there are signs that M&A is also picking up across the broader Canadian mining industry, particularly in base metals, where commodity prices have rallied more than gold in recent years, and companies scramble to replace reserves in a market, with relatively few viable assets left.

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