Canada’s Goldcorp Buys Into Chile Mine

Canada’s Goldcorp has agreed to acquire a 70% stake in the Chilean El Morro copper and gold mine from peer New Gold. Before acquiring the stake, Goldcorp will lend $463m to New Gold so it can exercise a right of first refusal and purchase the stake from Xstrata. As Xstrata’s current 30% joint venture partner in El Morro, New Gold holds the right, which came into effect on October 12, when Barrick Gold exited. After New Gold has bought the stake from Xstrata, it will sell it to Goldcorp for $50m in cash. After the transaction closes, Goldcorp will then hold 70% of El Morro and New Gold 30%. Goldcorp’s financial advisors are GMP Securities and legal advisors are Cassels Brock & Blackwell. New Gold’s financial advisor is BMO Capital Markets and legally, it was helped by Lawson Lundell. El Morro is an advanced stage copper-gold project in north-central Chile. Goldcorp says it contains proven and probable reserves of 6.7m ounces of gold and 5.7bn pounds of copper. Goldcorp president Chuck Jeannes says El Morro is in “one of the best mining jurisdictions in South America.” Goldcorp has operations throughout the Americas and says its gold production is 100% unhedged.