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JANUARY 2016 • E&MJ; 9 www.e-mj.com REGIONAL NEWS - LATIN AMERICA Barrick, Antofagasta Form Zaldívar JV Barrick Gold completed sale of a 50% inter- est in its Zaldívar copper mine in northern Chile to Antofagasta Plc on December 1. Plans for the transaction were initially announced in late July. Under the new own- ership structure, Zaldívar will have a joint Barrick-Antofagasta board of directors con- sisting of three Barrick nominees and three Antofagasta nominees. Antofagasta will act as the operator of the mine and will be sub- ject to oversight and direction by the board. Zaldívar is an open-pit, heap-leach cop- per mine located approximately 1,400 km north of Santiago and 175 km southeast of the port city of Antofagasta. The mine pro- duced 222 million lb of copper in 2014 at C1 cash costs of $1.79/lb and 167 million lb in the nine months ended September 30, 2015, at C1 cash costs of $1.67/lb. As of December 31, 2014, Zaldívar had 2.5 million metric tons (mt) of contained copper in proven and probable reserves, for a current reserve life of approximately 14 years, with further upside potential through exploration. Total consideration payable by Antofa- gasta for the transaction was $1.0 billion in cash, including $980 million upon closing and five annual payments of $5 million per year starting in 2016. Goldcorp, Teck Complete Project Corridor Transactions Goldcorp announced in late November completion of transactions necessary for the formation of a 50/50 joint venture with Teck Resources to develop their respective El Morro and Relincho projects in the Atacama region of Chile as a single project. The combined project currently has the interim name of Project Corridor. Formation of the joint venture followed completion of purchase by Goldcorp of New Gold's 30% interest in the El Morro project, giving Goldcorp 100% ownership of the project. Goldcorp paid New Gold $90 million in cash, and New Gold will have a 4% gold stream payable on future gold production from the El Morro property. New Gold will make ongoing payments of $400/oz for gold delivered under the streaming contract for the initial 217,000 oz and thereafter will make ongoing pay- ments of $400/oz plus a 1% per annum adjustment, compounded annually, com- mencing on the first anniversary of the streaming agreement. Following closing of the New Gold transaction, Goldcorp and Teck completed their transaction to combine El Morro and Relincho into a single project. The sites are separated by a distance of about 40 km. Based on the results of a preliminary eco- nomic assessment (PEA), the companies plan to construct a conveyor to transport ore from the El Morro site to a single-line mill at the Relincho site. The integrated project is expected to have a mine life of at least 32 years. Initial- stage development contemplates plant throughput capacity in the range of 90,000 to 110,000 mt/d, producing an average of approximately 190,000 mt/y of copper and 315,000 oz/y of gold in concentrates over the first full 10 years of operation. Combined project infrastructure will include a single desalination plant, a single port, a single transmission line, a single con- centrator, and a common tailings facility. Capital cost to bring Project Corridor into production is currently targeted at $3.5 billion. Silver Standard Evaluating Chinchillas Deposit Silver Standard Resources has entered into an agreement with Golden Arrow Resources to explore, evaluate and possibly develop Golden Arrow's Chinchillas project in Jujuy province, northern Argentina. The Chin- chillas project is based on a prospective sil- ver-lead-zinc deposit located approximately 30 km from Silver Standard's Pirquitas sil- ver-zinc mine. Under the terms of the agreement, Silver Standard is evaluating Chinchillas during an 18-month preliminary period as a mining operation to supply feed to the Pirquitas plant beginning in the second half of 2017. Silver Standard has committed to spend a minimum of $4 million for predevelopment activities. Expenditures may total up to $12.6 million based on the success of the predevelopment activities, including explo- ration, mine planning, metallurgical studies, permitting and engineering studies. Silver Standard has agreed to pay Golden Arrow up to C$2 million during the preliminary period in four C$500,000 cash installments. The first installment was paid on signing, and the remaining payments are conditional upon completion of project milestones. If Silver Standard elects to proceed to development, the two companies will enter into a 75:25 joint venture that will encom- pass both the Pirquitas and Chin- chillas properties, with Silver Standard as majority partner and operator. Silver Standard may elect to exercise this option at any time during the preliminary period. Upon entering into the joint venture, Silver Standard will pay Golden Arrow an amount equal to 25% of mine earnings generated by Pirquitas less certain expenditures for exploration and capital investment. Golden Arrow will initiate the process to obtain the necessary court and shareholder approvals required to form the joint venture. Barrick said its recently formed joint venture with Antofagasta to operate the Zaldivar mine, shown here, will 'help to realize [the mine's] potential,' including 'the ability to leverage Antofagasta's extensive in-country procurement programs, contractor relationships and administrative efficiencies.' (Photo: Barrick Gold)