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. Last Updated: 07/27/2016

Barrick Increases Its Highland Gold Stake

Canada's Barrick Gold will boost its stake in Highland Gold to 34 percent from 20 percent, said officials from Highland Gold.

Barrick, the world's largest gold producer, will take additional shares in Highland in exchange for handing over control of certain projects and joint ventures in Russia and the CIS. Two executives from Barrick will take up top positions at Highland Gold, which is registered on the British island of Jersey and operates out of Russia. The deal is subject to regulatory approval.

Dmitry Yakushkin, a spokesman for Highland, said Barrick would contribute global know-how, financing and efficiency to the gold deposits Highland has discovered in Russia.

"We have the assets and they have the experience," Yakushkin said. Highland produced almost 80,000 ounces in the first half of the year.

Highland has also cultivated relationships with federal and regional authorities during the seven years it has been operating in Russia. "We have very close relationships with three governors," Yakushkin said.

Aton Capital said that the deal was worth $110 million according to Wednesday's closing share price for Highlands. Most of the value Highlands receives would come from gaining complete ownership of the Taseyevskoye gold deposit, currently a 50-50 joint venture between the companies that is expected to produce more than 3.4 million ounces of gold, the brokerage said.

At Taseyevskoye and other gold deposits, Highland would make use of Barrick's global experience with "social work."

"Houses were built on the site where we wanted to do operations at Taseyevskoye," Yakushkin said. "To start production, we need to relocate people."

Highland stock gained 8.2 percent, trading at 181 pence ($3.45) in London on Thursday afternoon, the highest level since a deadly fire crippled one of the company's mines and killed 25 workers in September.

Shares of Barrick fell 0.8 percent, trading at 34.91 Canadian dollars ($30.73) Thursday morning in Canada.