Global gold majors Barrick Gold Corp. (NYSE: GOLD, TSX: ABX) and Shandong Gold Mining Co. are doubling down on South America’s mining potential with a $400 million expansion proposal for the Veladero gold mine in Argentina. The investment, submitted under Argentina’s new Large Investment Incentive Regime (RIGI), could add 1.6 million ounces of production by 2028—unlocking an estimated $3.8 billion in export revenue through 2033.
This move comes at a time when gold prices remain above $2,400 per ounce, supported by strong central bank buying and persistent geopolitical uncertainty. For investors, the combination of higher output and favorable market conditions could translate into substantial earnings upside.
Why This Matters for Investors
The Veladero project is already one of Argentina’s flagship mining operations, jointly owned 50/50 by Barrick and Shandong. This proposed expansion could extend the mine’s life well into the next decade, enhancing cash flow visibility for both companies.
Argentina’s pro-investment policy shift under the RIGI program is a key enabler. The regime offers tax breaks, duty exemptions, and fast-tracked approvals for projects exceeding $200 million—positioning Argentina as a more competitive mining jurisdiction in the global race for capital.
For Barrick, this expansion aligns with its strategy to grow Tier One gold assets—large, long-life mines capable of delivering annual production of over 500,000 ounces at low costs. For Shandong Gold, the project strengthens its global footprint and hedges against domestic market volatility.
Market Context & Competitive Positioning
The proposal lands in a bullish gold market backdrop. According to the World Gold Council, global gold demand rose 3% in H1 2025, driven by continued accumulation by emerging market central banks and ETF inflows. Higher interest in safe-haven assets is also counterbalancing the headwinds of a stronger U.S. dollar.
Regionally, South America is becoming a magnet for mining investment as countries seek to diversify their economies and attract foreign capital. Chile’s lithium and copper industries have already seen record inflows this year, while Argentina is positioning itself as a serious competitor in both precious and battery metals.
The Veladero expansion could give Barrick and Shandong a competitive advantage over rivals struggling with permitting delays or cost overruns in other jurisdictions. The scale of the output boost—1.6 million ounces over three years—could meaningfully lift Barrick’s total annual production, currently around 4.1 million ounces, and contribute to margin expansion if gold prices remain elevated.
Future Trends to Watch
- Policy Stability in Argentina – Continued political commitment to the RIGI program will be critical. Any rollback in incentives could slow project momentum.
- Gold Price Trajectory – Sustained prices above $2,300/oz would enhance project economics, while a sharp correction could pressure margins.
- Operational Efficiency – Maintaining low all-in sustaining costs (AISC) during the expansion phase will determine how much of the added output flows to the bottom line.
- Global Mining M&A Activity – With majors like Newmont, AngloGold, and Kinross seeking to expand reserves, South American gold assets could see more joint ventures or acquisitions.
Key Investment Insight
Investors with exposure to Barrick or Shandong Gold should monitor progress on Argentina’s regulatory approvals in the coming quarters. If sanctioned, the expansion could strengthen both companies’ cash generation profiles and increase their leverage to high gold prices. Additionally, mining-focused ETFs and funds with South American allocations could benefit from increased regional investment flows.
MoneyNews.Today will continue to track this development and its broader implications for the global gold market, offering investors timely updates on project milestones, market reactions, and policy shifts that could influence returns.
