State-run China National Gold Group Corporation (CNGGC) is interested to purchase African Barrick, a unit of Barrick Gold which earlier said wants to offload the company, for $3.9 billion.

Representatives of the world's biggest gold producer and world's largest producer of the yellow metal have reportedly been holding talks, although no definite decision has still been reached.

"Discussions are at an early stage, and there can be no certainty that these will result in the acquisition of all or part of Barrick's holding in ABG," Times of India quoted Barrick Gold as saying.

The Canadian company, which controls a 74 per cent stake worth $1.9 billion in the African unit, announced middle of this month it wants to divest its hold in the project, claiming African Barrick has performed poorly since being spun off from its Canadian parent in 2010.

Should the deal becomes successful, it will be the biggest deal that CNGGC ever entered into. CNGGC's reserves would increase by a third given that African Barrick is Tanzania's largest gold producer. This development comes in opportune timing for the company as it struggles to meet growing soaring demand for gold at the homefront. As of June, CNGGC's reserves are placed at 1,565 tonnes, or 50.3 million ounces.

"Gold corporations in China have always been trying overseas investment, but the main targets previously were Indonesia, Malaysia and other neighbor countries and the investment into gold ore was on a small scale, which as a result, didn't cause special attention," www.morningwhistle.com quoted Wang Lixin, a non-ferrous metal analyst. "Large scale an investment is quite rare."

The low prices of gold at present in the international market make it hard to miners to source funds.

"The difficult survival environment for foreign enterprises provides Chinese companies opportunities to buy oversea gold ore," the analyst said.

Barrick and CNGGC have not yet properly discussed how much stake can change hand. But under prevalent rules, an offer for more than 30 per cent controllership in African Barrick means a full takeover bid.

In 2011, CNGGC mined one million ounces of gold, more than 688,000 ounces that African Barrick churned out.

Earlier in August, CNGGC said it wants to focus on mergers and acquisitions in the second half of the year.