Gold miner Goldcorp Inc. (GG) announced that the company along with its joint venture partner Barrick Gold Corp. (ABX) will sell their respective stakes in Marigold mine in Humboldt County, Nev. to Silver Standard Resources Inc. (SSRI) for $275 million in cash.
The transaction is expected to close in Apr 2014. The completion of the transaction is subject to customary closing conditions, including regulatory approvals.
Both Goldcorp and Barrick invited a number of parties to conduct due diligence and put forth offers to buy Marigold. Marigold is jointly owned by Goldcorp and Barrick where the former is the operator with 66.7% stake while the latter holds the remaining 33.3% interest.
The sale of the mine is in line with Goldcorp’s strategy of focusing on core assets, thereby creating value for shareholders. Barrick is selling its 33.3% interest in Marigold mine as part of its ongoing efforts to shed some higher-cost assets, thereby reducing debt burden. This acquisition will help Silver Standard to meet its goal of adding an operating mine in a well-established and low-risk mining jurisdiction.
Marigold, an open-pit gold mine, produced 162,000 ounces of gold in 2013 and is expected to produce between 142,000 and 150,000 ounces of gold this year, as reported by Goldcorp. Total proven and probable mineral reserves as of Dec 31, 2012, at the Marigold mine was 294.5 million tons. According to Goldcorp, Marigold has consistently produced more than 140,000 ounces of gold annually at gold recoveries in excess of 70%.
Goldcorp currently carries a Zacks Rank #3 (Hold).
A better-ranked stock in the gold mining industry is Lake Shore Gold Corp. (LSG) holding a Zacks Rank #2 (Buy).
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