Goldcorp Inc. GG recently declared that it has wrapped up the acquisition of New Gold Inc.'s NGD 30% interest in the El Morro copper-gold project in Chile. Goldcorp made cash payment of $90 million to New Gold, along with a 4% gold stream payable on future gold production from the El Morro property. The company now has 100% ownership of the project.
Per the deal, New Gold will make ongoing payments of $400 per ounce of gold delivered, subject to a 1% per annum adjustment once 217,000 ounces have been delivered. El Morro had proven and probable gold reserves of 8.92 million ounces as of Dec 31, 2014.
Separately, Goldcorp and Teck Resources Limited TCK declared the completion of the earlier announced deal to integrate their respective interests in El Morro and Relincho projects in Chile into a 50/50 joint venture with the interim name of Project Corridor.
The two projects are located about 40 miles apart in the Huasco Province in the Atacama region of Chile. The combination of these two assets is anticipated to offer several benefits, including reduced ecological footprint and costs, improved capital efficiency, optimized mine plan, enhanced community benefits and community engagement.
Along with community consultation, a Pre-Feasibility Study is anticipated to begin in third-quarter 2016 and conclude by the end of 2017.
The decision to combine the projects was taken in August this year. Based on the Preliminary Economic Assessment, the companies will build a conveyor system to transport ore from El Morro to a single-line mill at Relincho. This is expected to lead to a number of positive economic outcomes.
Goldcorp’s shares rose around 1.5% in the trading session on Nov 25, before closing the day lower at $11.75.
Goldcorp, which is among the top gold miners along with Barrick Gold Corporation ABX, is progressing with its development projects amid a difficult operating environment and remains on track to attain its long-term production targets. The company is also actively focused on cost reduction, which should aid to its results.
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